Iran-Israel Conflict Sends European Diesel and Jet Fuel Prices Soaring to 15-Month High

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering Business

---

Image Source: Costfoto

The ongoing conflict between Iran and Israel has triggered a sharp spike in European diesel and jet fuel prices, pushing them to their highest levels in over 15 months, as fears grow over potential disruptions to key fuel exports from the Middle East.

Since the escalation of hostilities last Friday, the diesel premium over crude oil has surged by 60%, while jet fuel prices have jumped 45%, according to data from market pricing agency Argus. The surge reflects growing concern among traders that any disturbance in Gulf exports could lead to significant supply constraints just as Europe heads into the peak summer travel season.

While Brent crude, the international oil benchmark, has climbed approximately 9% to just under $77 per barrel, analysts emphasize that the broader oil market remains well supplied for now. Notably, Israel has avoided directly targeting Iran’s oil infrastructure.

Still, refined fuel prices have reacted more dramatically. “It is one of the most dramatic week-on-week jumps,” said George Maher-Bonnett of Argus. “Suddenly these margins have erupted.” He added that any disruption in the Strait of Hormuz a vital chokepoint for global oil and fuel shipments could critically impact Europe’s diesel supply.

According to data from Kpler, the Gulf region supplied over 20% of road diesel imports to the EU, UK, and Norway in 2024, primarily from Saudi Arabia, Kuwait, and the United Arab Emirates. The region also accounted for over half of Europe’s jet fuel imports, with about 13 million tons shipped last year.

The UK stands out as particularly vulnerable, importing about a third of its diesel and two-thirds of its jet fuel from the Gulf in the previous year.

As of Thursday, jet fuel was trading at a $27-per-barrel premium over Brent crude, while diesel stood even higher at nearly $29. Although the full impact of the price increase may not be immediately felt by consumers and airlines, Maher-Bonnett noted that price shocks will eventually seep through, especially as existing hedging contracts expire.

In contrast to diesel and jet fuel, gasoline margins in Europe have weakened amid sluggish demand in both local and major export markets, including the United States, Canada, and Nigeria. One significant factor has been the opening of Nigeria’s Dangote refinery once Europe’s second-largest gasoline export market which has slashed export volumes to the country by half.

As geopolitical tensions persist and global energy markets react, the volatility in refined fuel prices underscores Europe’s continued dependence on Middle Eastern energy supplies and the risks that come with it.