Military action pushes fuel markets up, Hungary cancels March toll increase
Market Monday - Week 10 - Middle East conflict threatens diesel price stability
Exactly one year ago, in our March 2025 Market Monday piece, “Oil and Diesel Dance in Tune”, we examined the delicate balance of the European diesel market. At the time, it was widely forecasted that abundant reserves and non-OPEC+ output increases would lead to price reductions, provided there were “undisrupted supply chains and absence of new geopolitical risks”. But we also concluded then that banking on geopolitical stability was a risky bet, and last weekend that bet was lost.
The military conflict initiated on February 28, 2026, involving the US, Israel, and Iran, has immediately impacted global energy markets. With the Strait of Hormuz, which handles roughly 20% of global oil ocean traffic, facing a de facto blockade, European fuel markets are bracing for an immediate cost crisis. When trading opened on March 2, Brent crude oil prices spiked up by 10-12%, briefly reaching $80 per barrel.
As we noted before, diesel markets exhibit asymmetric behavior: they rise quickly on bad news and fall slowly when markets calm. European fleets now face the threat of a push toward $100 per barrel of crude oil, which could translate to an automatic baseline increase of roughly €0,12 to €0,15 per liter in raw material costs and retail diesel price hikes of €0,20 to €0,30 per liter within weeks.
In the table below, we list anticipated transport cost effects if oil prices increase further in March, reflecting possible monthly diesel floater adjustments on the contracted transport market in April.
It’s unclear how long the blockage persists. Oil market analysts are modeling several potential trajectories for the conflict’s effect on oil markets:
Quick resolution: Brent at $80–$85. Even in the case of rapid de-escalation, heightened freight and insurance rates will leave a structural “war premium” on oil and diesel through the summer of 2026.
Mid-term resolution: Brent at $90–$100. If Iran engages in prolonged asymmetric warfare in the Hormuz Strait, flows will be severely bottlenecked. Even if OPEC+ quickly increases production, European pump prices will remain highly volatile, driving regional inflation higher.
Prolonged blockade: Brent at $125+. A conflict spanning many months with sustained closure of the Strait would trap Middle Eastern exports and shake the oil market, potentially driving crude past $125 per barrel and triggering skyrocketing diesel prices.
Keeping in mind recent historical developments, we can also expect quick reactions from EU governments should diesel prices approach the psychological 2,0 EUR/l retail mark to limit overall inflation, with measures such as fuel rebates, tax or excise cuts similar to those in force in 2022 and, partially, in 2023.
Industry News: Hungary Cancels March Toll Increase
In a rare piece of positive news for European hauliers, the Hungarian Government has officially cancelled the massive toll increase for main roads scheduled for March 1, 2026. Following intense pushback and negotiations with transport industry associations, the previously announced 30% main roads toll hike has been scrapped, according to the decision published in the official Hungarian Gazette on February 26. Tolls will remain at the levels set in January 2026, providing a slight operational relief for trade routes within Hungary.
Oleksandr Kulish
Senior Consultant