Global Fuel Crisis Intensifies Amid Middle East Conflict
Governments worldwide are implementing emergency measures to address a deepening fuel crisis as escalating Middle East tensions disrupt oil supplies and drive up prices.
The ongoing conflict in the Middle East has led to significant disruptions in global oil supplies, causing a surge in fuel prices and prompting various countries to adopt emergency measures to mitigate the economic impact.
In South Korea, the ruling Democratic Party announced plans to prepare a supplementary budget of approximately 25 trillion won ($16.61 billion) to support those affected by rising oil prices linked to the conflict. The additional spending plan aims to utilize expected surplus tax revenues rather than issuing treasury bonds to minimize market disruption.
The Philippines has temporarily permitted the limited use of a cheaper but more polluting type of fuel to ensure supply continuity. The Department of Energy stated that only vehicles manufactured in 2015 or earlier, traditional buses, power plants, generators, and the maritime and shipping sectors would be allowed to use petroleum products meeting Euro-2 standards. This measure aims to help maintain a continuous, sufficient, and accessible fuel supply while allowing limited flexibility for sectors that may be affected. Oil companies are required to keep Euro-2 fuel separate from higher-grade Euro-4 fuel in storage, transport, and retail systems.
In Malaysia, Prime Minister Anwar Ibrahim announced an increase in financial support from around 700 million ringgit ($178 million) to 3.2 billion ringgit in less than a week following the surge in global oil prices. He emphasized that protecting the welfare of citizens and businesses remains a priority amid ongoing uncertainty, noting that the subsidies allow Malaysians to pay less than full market prices.
Pakistan has experienced a sharp rise in air ticket prices following Eid al-Fitr, driven by increased seasonal demand and higher fuel costs. Domestic ticket prices rose between 15% and 20% during the holiday period compared to pre-Eid levels, with some travelers paying up to 30% more. The increase is attributed to strong travel demand and a sharp rise in jet fuel prices, which have doubled in Europe and increased by nearly 80% in Asia since the start of the US-Israeli war on Iran in late February.
Sri Lanka has raised fuel prices by around 25%, citing rising global oil costs and declining domestic reserves following weeks of panic buying. The latest increase, the second in two weeks, has pushed local fuel prices up by roughly one-third since the start of the Middle East war. Authorities have also introduced strict fuel rationing and ordered the closure of schools, universities, and government offices every Wednesday. Long queues of vehicles continue to form at fuel stations across the country.
The European Union has called for the reopening of the Strait of Hormuz and a halt to strikes on energy and water infrastructure amid the Middle East conflict impacting global energy prices. EU leaders condemned civilian casualties and economic instability caused by the war, urging Iran to cease attacks and promising to explore ways to secure free navigation in the strait. Despite rising energy concerns and calls from the U.S. for military support, EU leaders expressed reluctance to intervene militarily, emphasizing the need for de-escalation and international cooperation.
The conflict has also led to attacks on key Gulf energy infrastructure, raising the risk of long-term disruption. Iran targeted critical sites in Qatar, Kuwait, Saudi Arabia, the UAE, and Oman, severely affecting the energy supply chain. The closure of the Strait of Hormuz, a major chokepoint, compounded the disruption, even as countries like Saudi Arabia and the UAE tried to reroute exports via alternative paths. The Ras Laffan LNG terminal in Qatar, responsible for 20% of global LNG, was badly damaged; facilities like Kuwait’s Mina refineries, Oman’s Salalah LPG plant, and Abu Dhabi’s Shah gas field saw extensive interruptions. Supply shortages have begun hitting Asian economies hardest, prompting government austerity measures on energy use.
The ongoing war in Iran has severely disrupted oil exports through the critical Strait of Hormuz, which handles about 20% of global oil and LNG traffic. This has triggered a global energy crisis, pushing prices up and heavily straining import-dependent economies, especially in Asia, Europe, and Africa. The crisis has emphasized the risks of overreliance on fossil fuels and the necessity of accelerating the global transition to renewables.
In response to soaring global oil prices triggered by the ongoing Iran war, Hungarian Prime Minister Viktor Orbán announced a fuel price cap effective from midnight. Gasoline will be capped at 595 forints ($1.75) per liter and diesel at 615 forints ($1.81), applicable only to vehicles with Hungarian registration. To support this measure, Hungary will release oil reserves. This action mirrors a previous price cap introduced in 2021, which was later lifted due to overconsumption and fuel shortages.
The Strait of Hormuz, a major maritime choke point for global energy trade, has experienced ongoing geopolitical and economic disruption since 28 February 2026, following joint military strikes by the United States and Israel on Iran. In response, Iran launched retaliatory missile and drone attacks on US military bases, Israeli territory, and other Gulf states, while its Islamic Revolutionary Guard Corps (IRGC) issued warnings prohibiting vessel passage through the strait, leading to an effective halt in shipping traffic. This disruption affected about 20% of the world's daily oil supply and significant volumes of liquefied natural gas (LNG), prompting major shipping firms to suspend operations in the area.
The crisis has sent shockwaves through global energy markets and raised security concerns. Brent crude oil prices surpassed US$100 per barrel on 8 March 2026 for the first time in four years, rising to US$126 per barrel at its peak. The closure of the strait has been described as the largest disruption to the energy supply since the 1970s energy crisis, as well as the largest in the history of the global oil market.
In response to the escalating conflict, the Pakistan Navy launched Operation Muhafiz-ul-Bahr on 9 March 2026 to safeguard Pakistan's Sea Lines of Communications (SLOCs) and ensure the uninterrupted flow of energy supplies to the country.
The ongoing conflict in the Middle East has led to significant disruptions in global oil supplies, causing a surge in fuel prices and prompting various countries to adopt emergency measures to mitigate the economic impact.
