Petrol and diesel prices have climbed sharply across Europe as disruption in the Strait of Hormuz and Bab-el-Mandeb puts pressure on crude and refined fuel supplies. The effect varies significantly between countries: headline pump prices are highest in parts of northern and western Europe, while the burden relative to household purchasing power is greatest in several Balkan states.
The disruption comes amid renewed hostilities following stalled negotiations between Iran and the United States. Reduced shipping through key maritime routes, refinery problems and competition for alternative supplies have combined to push fuel prices above €2 per litre in many European markets.
Where petrol and diesel cost the most
According to the fuel-price tracker cited in the source report, the Netherlands recorded Europe’s highest average petrol price on Tuesday at €2.43 per litre. Denmark followed at €2.35, with Finland at €2.32.
Petrol prices were also elevated in France and Greece, at approximately €2.23 and €2.20 per litre respectively. Diesel prices were higher still in several countries:
- Denmark: €2.52 per litre
- France: €2.40 per litre
- Italy: €2.36 per litre
The difference between markets is substantial. Diesel was reported at about €1.70 per litre in North Macedonia and €1.72 in Andorra, nearly €1 less than the Danish average.
Why headline prices do not tell the whole story
Comparing the price displayed at the pump provides only part of the picture. A full tank represents a much greater financial burden in countries where average incomes and purchasing power are lower.
The analysis used purchasing power standards, or PPS, to adjust for differences in national price levels. It then estimated the cost of a 50-litre tank against GDP per capita. This approach shows how expensive refuelling is relative to the resources available to households, rather than simply ranking countries by the number printed on the pump.
On that measure, Bosnia and Herzegovina experienced the greatest pressure among the countries examined. Within the European Union, Greece emerged as the country where petrol and diesel costs were squeezing purchasing power most severely.
What the purchasing-power comparison shows
- Nominal prices are highest in countries such as Denmark, the Netherlands and France.
- Relative affordability is worse in parts of south-eastern Europe.
- A lower price per litre does not necessarily mean fuel is more affordable for local households.
- A 50-litre fill-up can consume a larger share of income where wages are lower.
Shipping disruption is affecting Europe’s fuel supply
The latest price surge is linked to attacks and security risks around two important shipping corridors. The Strait of Hormuz is a major route for energy shipments leaving the Gulf, while Bab-el-Mandeb connects the Red Sea with the Gulf of Aden and the wider Indian Ocean.
According to the source report, attacks have reduced daily cargo traffic through Hormuz to fewer than 20 vessels. Disruption around Bab-el-Mandeb has also affected a route that has long been important for energy and wider commercial trade.
When tankers are delayed or forced to use longer routes, the consequences can extend beyond crude oil. Refineries may also struggle to secure the specific grades of crude they need, increasing transport and processing costs.
Refinery shortages are adding to the pressure
The International Energy Agency reported that global refinery production in July 2026 was almost five million barrels per day below the level recorded in July 2025. Lower refinery output creates a bottleneck: even when crude is available, there may not be enough capacity to turn it into petrol, diesel and aviation fuel.
Supply problems have been compounded by reported attacks affecting refineries in Saudi Arabia, Kuwait and Bahrain. Reduced production at major facilities tightens the market for refined products and pushes up refining margins.
European consumers are particularly exposed to diesel-market pressure. Refineries must compete for alternative crude supplies, while diesel demand is also being affected by disruptions elsewhere. The source report notes that refinery damage linked to the war in Ukraine is adding another shock to global diesel availability, as buyers including Turkey and Brazil seek replacement supplies.
When could diesel prices ease?
There is no immediate guarantee that pump prices will fall. However, European Central Bank experts cited in the report expect diesel refining margins to peak in October, based on refined-diesel futures data from the London Stock Exchange Group. Petrol margins were reported to have peaked in August.
A peak in refining margins would not automatically mean cheaper fuel for motorists. Retail prices will also depend on crude costs, shipping insurance, exchange rates, taxes, refinery output and how quickly transport through the affected routes improves.
What the fuel crisis means for European households
Higher petrol and diesel prices can affect more than drivers. They can raise the cost of commuting, logistics, food distribution and public services. Businesses that rely on road transport may face higher operating costs, while households can see indirect effects through the prices of goods delivered by truck.
The impact will differ across Europe. Countries with high fuel taxes may show higher pump prices, while countries with lower incomes may experience a greater affordability burden even when the nominal price is lower. For Ireland, the main risk is indirect: internationally traded fuel costs can feed into transport and household expenses, although the eventual effect depends on domestic taxes, retail margins and wholesale supply conditions.
What happens next?
Markets will be watching three developments closely:
- Whether shipping through the Strait of Hormuz and Bab-el-Mandeb can return to more normal levels.
- Whether damaged or disrupted refineries restore production.
- Whether diesel refining margins begin to decline as forecast later in the year.
The key lesson from the latest EU news is that pump prices are shaped by the entire energy supply chain. Crude availability, shipping routes, refinery capacity and household purchasing power all matter. Even if wholesale conditions improve, drivers may not see immediate relief at the forecourt.
Conclusion
Europe’s fuel-price surge reflects a wider global supply disruption rather than a single national decision. Denmark, the Netherlands and France are among the countries reporting the highest prices per litre, while Greece and several Balkan countries face the greatest pressure when costs are measured against purchasing power. The next decisive signals will come from shipping security, refinery output and diesel margins in the months ahead.
