Fuel Prices Near Record Highs Amid Escalating Middle East Conflict
Diesel and natural gas prices in Europe are approaching historic highs, driven by escalating conflict in the Middle East and EU regulatory changes. Economists warn of growing pressure on businesses, consumers and borrowers.
On Friday, September 11, the Platts petrol quotation rose by more than 7 cents per liter, while diesel prices in the US reached a historic record. In Europe, the diesel quotation came within about 3% of its own record — having risen roughly 65%, or about 60 cents per liter, over less than 2.5 months, with a 4.5% single-day jump recorded on September 10 alone. At the same time, exchange-traded natural gas futures in Europe hit their highest level in more than three years.
Economic impact
Rising diesel and gas prices are pushing up costs across transport, heating, fertilizers, industrial production and agriculture, adding to inflationary pressure throughout the eurozone. Businesses are being forced to cut costs while also raising prices for their products and services. Additional pressure comes from EU regulatory changes — the planned ETS2 emissions trading scheme could add tens of cents per liter to petrol and diesel prices, while the new EU Packaging and Packaging Waste Regulation (PPWR) is affecting trade and putting pressure on small and medium-sized businesses. Customs duties on goods from third countries have also been introduced.
In Latvia, as of December 31, 2025, the out-of-court debt collection portfolio already contained more than 1.3 million consumer debt cases totaling over 1 billion euros. Against this backdrop, the European Central Bank has raised interest rates on loans.
Middle East conflict and the oil market
The conflict in the Middle East has expanded from the Strait of Hormuz to the Red Sea and Gulf of Aden region, where Houthi military activity has triggered a new wave of oil price increases. The price of a barrel of oil stood at around $70 before the conflict began but reached about $105 on September 11. Given global oil consumption of roughly 103 million barrels per day, this price difference translates into approximately $3.6 billion in additional costs per day — not counting the even steeper rise in physical-market Platts quotations for jet fuel and diesel.
