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Tensions in the Middle East are once again sending ripples across Europe. As Israel and Iran exchange airstrikes in what is rapidly becoming one of the most dangerous escalations in years, economic analysts in Czechia are warning that the fallout could soon reach local gas stations, households, and businesses.
Although Czechia is geographically distant from the conflict, its economic exposure to global energy markets leaves it vulnerable to shifts in oil prices and currency volatility. A spike in oil prices has already begun, and experts suggest this may be only the beginning if hostilities persist.
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Oil prices jump, fuel costs expected to rise
Global oil prices surged in mid-June following Israel’s airstrikes on Iranian targets and Iran’s retaliatory missile attacks. According to analysts cited by iDnes.cz, the Brent crude price reached as high as USD 78 (CZK 1,680) per barrel—its highest point since January—before settling slightly lower in volatile trading. This marks a sharp increase from early June, when prices hovered around USD 64 (CZK 1,380) per barrel.
For Czech consumers, the impact is likely to be felt at the fuel pump within days. Boris Tomčiak, an analyst at Finlord, estimated that petrol and diesel prices could rise by CZK .30 to .50 per liter by the end of this week. In the case of further escalation, prices could increase by up to CZK 3 per liter.
“Fuel prices will rise. This will be noticeable quite soon,” Tomčiak said.
The average price of a liter of Natural 95 petrol currently stands at CZK 33.61, while diesel costs about CZK 32.03. The lowest prices are in the Ústí region, while Prague remains the most expensive. However, if tensions persist or worsen, these figures may quickly climb.
The reason lies in the global oil supply chain. Iran produces about 3.3 million barrels of oil per day, accounting for roughly 3 percent of global demand. While not the largest exporter, any disruption in Iranian output or exports can tighten global supply and cause price surges.
According to Reuters, although Israel has not directly targeted Iranian oil infrastructure yet, Iranian authorities have confirmed partial disruptions, including a fire at the South Pars gas field—one of the world’s largest.
Broader economic risks include inflation and currency volatility
The potential consequences for Czechia extend beyond the petrol station. A prolonged crisis in the Middle East could trigger broader macroeconomic effects, including inflationary pressure and foreign exchange instability.
Pavel Peterka, chief economist at XTB, warned that continued tension may weaken the Czech koruna, which would in turn raise the cost of imports—including fuel and other goods priced in dollars. “If there is no quick de-escalation, we can expect a weakening koruna. This raises the cost of imports and may drive up inflation,” Peterka explained.
A weaker currency would also increase pressure on the Czech National Bank, which may be forced to weigh monetary policy responses at a time when inflation has only recently come under control. In April, Czech inflation stood at 2.9 percent, within the central bank’s target range. Rising energy costs, however, could reverse this trend.
Business sectors reliant on transportation, such as logistics, agriculture, and retail, may also experience cost increases, which could trickle down to consumers. Moreover, Czech industrial producers may find themselves paying more for raw materials, while exporters could face uncertainty in global markets rattled by geopolitical shocks.
While the Czech Republic does not import crude oil directly from Iran, it remains deeply connected to European and global energy markets. Sudden price spikes, shipping disruptions, or reduced refinery output in the region could affect supply chains across the continent.
In the longer term, much depends on whether Israel and Iran continue down a path of escalation or find a way to reduce tensions. Iranian officials have stated that they will halt retaliatory strikes if Israel stops its attacks. However, with both sides citing national security concerns and accusing the other of aggression, prospects for immediate de-escalation remain uncertain.
