Global energy market impacts of Iran conflict

Global fuel and oil markets have experienced significant volatility and price increases driven by a conflict in Iran that began in February 2026. The closure of the Strait of Hormuz and subsequent supply disruptions have contributed to rising costs globally.

In the United States, national gasoline prices rose nearly 30 percent compared to the previous year, reaching an average of 4.06 USD by mid-August. President Donald Trump characterized these rising costs as a ‘patriotic sacrifice’ for the war. Similarly, in Germany, diesel and gasoline prices have frequently exceeded two euros per liter due to volatile crude prices and high taxation.

China has attempted to stabilize global markets by reducing its crude imports by half and utilizing state engineering to manage domestic demand and reserves. While this intervention helped prevent a catastrophic price surge, it has resulted in domestic deficits in diesel, gasoline, and kerosene. In Mexico, the impact of international fluctuations has been uneven; while regular gasoline remained relatively stable due to tax protections, premium gasoline costs rose by 11 percent, and diesel subsidies were significantly reduced.