On February 28, the United States and Israel launched a military operation against Iran that has disrupted global energy markets. For many, the conflict may seem distant, but the prices at any gas station are enough to understand that it is not. In twelve days, the price of commercial diesel rose by 26%, from €1.45 per liter to €1.82. This is not a projection or a theoretical scenario. It is what thousands of Catalan companies are paying today every time they fill up their tanks.
The reason is the de facto blockade of the Strait of Hormuz, the maritime corridor through which approximately 20% of the world's oil supply passes. This situation has caused the price of Brent crude, which was trading at $73 a barrel before the conflict, to surpass $100, the threshold that most analysts consider critical for the European economy.
Beyond prices, the conflict adds a new layer of uncertainty to an already strained business environment. Catalan exporters in the Middle East, a €2.5 billion annual market, face increased uncertainty regarding orders and logistics. And at a time when many companies are experiencing commercial and financial uncertainty, all of this impacts confidence and investment decisions.
What makes the situation particularly worrying is not only the price level, but also the speed at which it has risen. In 2022, with the invasion of Ukraine, there was more time and more expensive oil to reach similar levels at the pump. Now it has happened in less than two weeks, and although the price of a barrel of oil is still below its 2022 peak, prices at the pump are already approaching those levels.
The increase in diesel prices is the effect that everyone sees, but the transmission of the shock goes much further.
The first sector affected is professional transport. Catalonia is the first. hub Southern European logistics sector, with nearly 170,000 direct jobs, is facing a price increase. This affects the entire sector and translates into higher costs for many products, but the biggest problem lies with companies operating under public concessions, such as school transport, intercity buses, and municipal transportation, whose contracted prices no longer reflect current market conditions. The law includes mechanisms to rebalance these contracts in the event of unforeseen circumstances, but these mechanisms are not activated with the speed required by a shock like this, and in the meantime, companies are absorbing the full impact.
The second impact will reach consumers' shopping baskets through several simultaneous channels. The rise in agricultural diesel fuel prices during the peak of the tanning season directly increases production costs in the fields. Urea, one of the most widely used fertilizers and closely linked to the price of gas, has also become around 20% more expensive as a result of the conflict. And the fishing sector, where diesel is one of the main operating costs, faces margins that cannot absorb increases of this magnitude. All of this puts pressure on food costs which, if the situation is not resolved, will ultimately affect prices.
The third transmission channel is less visible but equally advantageous. Natural gas in the European market has also risen by nearly 70% since the start of the conflict, directly impacting companies with a high energy component in their cost structure. From the chemical industry to sectors that don't make headlines, such as industrial laundries that serve hospitals and nursing homes and cannot adjust their prices, these are mostly SMEs.
What to do and what to watch
For the moment, macroeconomic forecasts have not been revised downwards, pending the duration of the conflict. But the experience of 2022 shows that when measures are delayed, the cost to businesses has already been incurred. It is worth remembering that the 2022 subsidy was activated when diesel was at €1.84 per liter. Today it is already close to that level (€1.82).
The fact that the Government convened an extraordinary meeting of the Social Dialogue Council with economic and social stakeholders on Friday indicates that the potential severity of the situation is being recognized institutionally. From the business sector, especially Pimec, demands have been made for subsidies for professional diesel, oversight of wholesale margins, containment mechanisms should the energy shock extend to electricity as well, and an immediate review of public contracts with a significant energy component, among other things.
The ultimate severity of this episode will depend on how high oil prices rise and how long they remain high. If the conflict is resolved within a few weeks and the Strait of Gibraltar reopens, the impact will be an intense but temporary shock. If it drags on, energy prices will affect the entire economy and could reverse the hard-won moderation of inflation. In any case, preserving the viability of businesses is essential to maintaining employment and economic activity. The difference between a scare and a structural problem will be determined in the coming weeks, as will the speed of the government's response.
