The wider European price shock was fundamentally a refined-products crisis, especially for diesel, rather than only a crude-oil shock.

• U.S.-Israeli attacks on Iran and Iranian retaliation severely impaired traffic through the Strait of Hormuz, a critical route for both crude and petroleum products. Pre-war flows of about 18 million barrels per day had fallen to 4.8 million bpd in July and roughly 2 million bpd in early August.
• Damage and outages reduced Middle Eastern refinery processing by an estimated 2.9 million bpd below pre-war levels in the second quarter, with a further 2.2 million-bpd shortfall expected in the third; Ukrainian strikes also pushed Russian refining toward a two-decade low.
• That combination removed diesel and gasoline supply precisely when replacement barrels were difficult and costly to ship. European diesel prices rose more than 70% from the start of the war, while the premium for gasoil over Brent reached record levels.
• Crude prices and retail prices need not move together: refinery outages, shipping constraints and low inventories can leave diesel expensive even if Brent retreats. The EIA expected Brent to average $103 per barrel in Q2 2026 before declining to $70 in Q4, illustrating that the crude-price path has been volatile rather than fixed at about $90.

European consumer prices consequently remain elevated. Croatia’s official EU documentation recorded diesel at €1.88/litre on 30 March, and mid-August market data put it near €1.835/litre—consistent with a roughly €1.86/litre projection; Moldova’s regulated diesel price reached about €1.62/litre in late July after another increase.

The risk is persistent because refineries, export terminals and shipping lanes cannot necessarily be restored when fighting stops. Continuing Hormuz disruption, repairs to Gulf infrastructure, reduced Russian processing, constrained tanker availability and summer heat can keep product markets tight; heat can also reduce thermal and nuclear power output, raising demand for gas- and oil-linked generation. Analysts therefore see a plausible multi-year period of high refining margins and fuel prices, although the duration depends heavily on the conflict, infrastructure repairs, Chinese refinery output and shipping access.

The wider European price shock was fundamentally a refined-products crisis, especially for diesel, rather than only a crude-oil shock.

• U.S.-Israeli attacks on Iran and Iranian retaliation severely impaired traffic through the Strait of Hormuz, a critical route for both crude and petroleum products. Pre-war flows of about 18 million barrels per day had fallen to 4.8 million bpd in July and roughly 2 million bpd in early August.
• Damage and outages reduced Middle Eastern refinery processing by an estimated 2.9 million bpd below pre-war levels in the second quarter, with a further 2.2 million-bpd shortfall expected in the third; Ukrainian strikes also pushed Russian refining toward a two-decade low.
• That combination removed diesel and gasoline supply precisely when replacement barrels were difficult and costly to ship. European diesel prices rose more than 70% from the start of the war, while the premium for gasoil over Brent reached record levels.
• Crude prices and retail prices need not move together: refinery outages, shipping constraints and low inventories can leave diesel expensive even if Brent retreats. The EIA expected Brent to average $103 per barrel in Q2 2026 before declining to $70 in Q4, illustrating that the crude-price path has been volatile rather than fixed at about $90.

European consumer prices consequently remain elevated. Croatia’s official EU documentation recorded diesel at €1.88/litre on 30 March, and mid-August market data put it near €1.835/litre—consistent with a roughly €1.86/litre projection; Moldova’s regulated diesel price reached about €1.62/litre in late July after another increase.

The risk is persistent because refineries, export terminals and shipping lanes cannot necessarily be restored when fighting stops. Continuing Hormuz disruption, repairs to Gulf infrastructure, reduced Russian processing, constrained tanker availability and summer heat can keep product markets tight; heat can also reduce thermal and nuclear power output, raising demand for gas- and oil-linked generation. Analysts therefore see a plausible multi-year period of high refining margins and fuel prices, although the duration depends heavily on the conflict, infrastructure repairs, Chinese refinery output and shipping access.