- Fuel prices are expected to rise by a few cents next week.
- The Slovak government has taken extraordinary measures to stabilize the fuel market.
- The war in the Middle East is causing the biggest shortfall in global oil supplies in history.
The upward pressure on fuel prices due to high geopolitical uncertainty and oil price volatility on world markets should continue next week. Fuel prices could rise from two to five cents. This was stated by Ondrej Greguš, XTB financial markets analyst.
“The rise in energy prices and the disruption of oil supplies to the region have already begun to manifest themselves in Central Europe as well. The Slovak government has therefore taken extraordinary measures to stabilize the fuel market,” he explained.
He noted that in the past week the situation on the energy markets has significantly intensified in connection with the ongoing conflict in the Middle East. The war in the Middle East, according to the International Energy Agency (IEA), is causing the largest supply shortage in the history of the global oil market. The flow of oil through the Strait of Hormuz has dropped from an initial 20 million barrels a day to a minimum, with Gulf countries cutting output by at least 10 million barrels a day.
“Oil prices have experienced extreme volatility. Oil climbed above $112 a barrel during the week, but fell nearly 11% to around $100 on Monday after Trump announced a delay in attacks on Iran’s energy infrastructure“, he emphasized.
“Markets remain cautious. The probability of a US recession has risen from 22% in early March to 36% currently, according to prediction markets. From a global economic perspective, the energy market remains the biggest risk. Should the conflict remain short-lived, the effects should be temporary. A bigger problem would arise if high energy prices persisted for a long time and were gradually reflected in the prices of goods and services,” the analyst added.
