Diesel Crisis Grips Europe: Prices Surge Over 30%

The price of diesel fuel has surged by more than 30 percent across Europe since the beginning of the Middle East war. This dramatic increase underscores Europe's significant dependence on imported energy and the persistent importance of diesel in the automotive market.

Diesel is widely used throughout Europe for a variety of applications, including trucks, tractors, buses, and construction machinery. Despite the growing popularity of electric cars, diesel remains the dominant fuel. For instance, in 2024, diesel accounted for a substantial majority of transport fuel sales in Latvia (86%), France (73%), and Germany (66%).

The international supply balance for diesel was already strained before the conflict. Experts predict further price increases, with a potential impact on inflation, as long as trade routes like the Strait of Hormuz remain blocked. The per-barrel price of diesel exceeded $200 in Europe recently, a level not seen since March 2022.

European Union nations are now seeking alternative diesel suppliers, having previously relied on Russia. Current sources include India, Turkey, the United States, and Saudi Arabia, though a significant portion of these supplies transited through the Strait of Hormuz.

In response to the crisis, some countries have implemented measures. Slovakia temporarily restricted diesel sales, requiring foreigners to pay a higher price. Ireland and Spain have reduced fuel taxes. Refineries are operating at full capacity, but options for increasing supply are minimal. Experts suggest that without lifting sanctions on Russia, Europe's viable options are limited to postponing refinery maintenance, utilizing strategic reserves, and reducing consumption.