Fuel prices are back on the rise in Luxembourg. Since the end of February, several successive adjustments to maximum prices have been decided by the Ministry of the Economy, as world oil markets react to the military escalation in the Middle East. Unleaded 95 petrol rose from €1.483 a litre on 24 February to €1.522 on 4 March. Diesel initially rose more moderately, from €1.465 a litre to €1.485 on 3 March.

But a much more brutal movement is taking place today, 5 March: the maximum price of diesel jumps to €1.696 a litre, an increase of more than 21 cents in a single revision. Over the same period, 98 petrol has also been adjusted upwards, from €1.617 a litre to €1.648.

The increase also affects other petroleum products used by businesses. Diesel for industrial and commercial use - used in particular in logistics and transport - has also risen sharply, to €1.252 per litre on 5 March, an increase of more than 21 cents in a single revision. For hauliers and logistics companies, which are particularly sensitive to variations of just a few cents, this type of adjustment can quickly translate into higher operating costs.

These developments mark the first visible effects, in Luxembourg, of the tensions on the international energy markets. Oil prices have risen sharply in recent days. In Asian trading on Thursday morning, Brent crude for delivery in May gained 3% to reach $83.84, while US West Texas Intermediate crude rose by 3.5% to $77.29. This is still a long way from forecasts of $120 or $130 a barrel.

This rise comes as the war in the Middle East entered its sixth day with no sign of de-escalation, fuelling fears of oil supply disruptions from a region that accounts for a major share of global crude exports.

Concerns are focused in particular on the Strait of Hormuz, a strategic passage for the export of oil and petrochemicals from OPEC countries. A prolonged disruption in this area could affect a significant proportion of the world's oil trade. No more commercial vessels have passed through since Monday evening.

Safety stocks

However, some experts believe that the markets still have safety margins. "Most countries have huge stocks that can last two to three weeks," explains Marc-Antoine Eyl-Mazzega, Director of the Energy and Climate Centre at the French Institute of International Relations (IFRI), in an interview with Le Monde. In his view, the logistical reserves held by the major oil companies, notably Saudi Aramco of Saudi Arabia, as well as the strategic stocks of consumer countries, provide a safety net in the event of a major disruption.

The member countries of the International Energy Agency could also decide to release their strategic reserves in a coordinated manner in order to stabilise markets and contain price rises.

Recent developments in the oil market are also influenced by the structure of global supply. In recent years, the bulk of production growth has no longer come from OPEC member countries, but from producers such as the United States, Brazil and Guyana. This additional production has helped to maintain a relatively abundant supply on the international market.

More lasting consequences for gas

The disruption caused by the conflict, on the other hand, could have more lasting consequences for the gas market. Qatar alone accounts for around 20% of global trade in liquefied natural gas (LNG), and any export difficulties could impact global supplies for several months.

In this uncertain international context, the first increases seen at the pump in Luxembourg could be just the beginning if tensions on the energy markets were to continue.