Euro Area Fuel Prices Skyrocket Amid Middle East Conflict

Retail fuel prices have surged across the euro area in 2026 following the outbreak of the conflict in the Middle East, driving up energy inflation and prompting analysis from European Central Bank (ECB) experts.

According to a blog post by economists Friderike Kuik, Eliza Lis, Christiane Nickel, and Mario Porqueddu, prices for refined fuel and crude oil move pretty much in lockstep from month to month. However, refined products, particularly diesel, have outpaced crude at times since 2022, signaling the role played by refining margins.

Prices for Brent crude rose rapidly in March after the outbreak of the conflict, peaking at $138 per barrel in early April, almost double the level seen in late February. Diesel prices after the refining process rose even faster, peaking at $197 per barrel in April, resulting in ever-higher prices at the pump.

By the first week of April, retail diesel prices averaged €2.18 per litre across the euro area compared with €1.63 per litre in late February, a sizeable jump of a third. While the pass-through from oil prices to pump prices is complete in levels, in relative terms, retail prices increased less due to a large share of the retail price being fixed and not moving with oil market prices.