Fuel prices set to rise in Portugal as US-Iran ceasefire collapse sends oil surging

Oil price surge

Brent crude futures for September delivery closed 5.2% higher on Wednesday at $78.02 a barrel, after briefly topping $80 during the session. The spike, one of the largest daily jumps since the conflict with Iran began in late February, followed President Donald Trump's announcement that the US-Iran ceasefire had ended. A week earlier, Brent had been trading around $70.

Trump's statements increase the risk of a new escalation and more pressure on supply if Iran closes the Strait of Hormuz again.

The ceasefire, brokered in May, was violated on Tuesday night, and by Wednesday morning Trump declared it over. The renewed geopolitical tension immediately revived fears of disruptions to Middle Eastern oil shipments.

Impact at the pump

Portuguese consumers will feel the effect next week. According to SIC Notícias, diesel is expected to rise by 7 cents per litre and gasoline by 3 cents, though final figures depend on market closes on Friday. Earlier in the week, forecasts had pointed to smaller increases of 3 cents for diesel and 1.5 cents for gasoline, but Wednesday's crude surge pushed expectations higher.

The sector cites a shortage of refined products, possibly linked to damaged infrastructure in the Middle East that is delaying oil refining. Fuel prices in Portugal are composed of taxes (VAT, ISP, carbon tax), company margins, and transport and logistics costs, on top of the quotations for refined diesel and gasoline.

Government demands transparency

Minister of Environment and Energy Maria da Graça Carvalho said the government wants to understand how fuel prices are formed and has asked the national energy sector regulator and the energy services regulatory authority to investigate.

We hope that prices continue to fall, if everything goes well internationally, and we want to see how this will be reflected in the price that people will have to pay for gasoline and diesel.

She noted that when international markets rise, pump prices jump quickly, but when they fall, the reduction takes longer to reach consumers. The government is demanding clarification and transparency from the sector.

IMF warns of renewed risks

The IMF had been preparing to signal that global risks were becoming more balanced after the May ceasefire. In its updated World Economic Outlook released on Wednesday, it noted that "the most imminent risk for the baseline scenario stems from the evolution of the situation in the Middle East" and that "the rekindling of geopolitical tensions will harm economic growth and worsen inflationary pressures."

Before the ceasefire collapsed, the Fund had assumed a smoother reopening of the Strait of Hormuz could lead to lower commodity prices and stronger growth. Instead, the oil spike overshadowed that cautious optimism, confirming that uncertainty is set to persist.