The world will not be the same after the Iran–Israel conflict. While there hasn’t yet been a significant impact on oil prices, we are very close to a dramatic surge, energy lawyer Mate Toth told Magyar Nemzet.
In the past few days, the global oil markets haven’t been rocked too badly. I believe this is because market players still had some buffer built in after recent volatility, so this was still within acceptable bounds, so to speak,
the expert said.
But we’re right on the edge of an oil price explosion,
he warned.
The main reason, Mate Toth said, is fear surrounding the Strait of Hormuz. Twenty-one percent of the world’s oil trade passes through it, and it’s also a critical route for LNG shipments from the Middle East, so natural gas is indirectly at risk too.
If anything happens in the Strait of Hormuz, oil prices will immediately shoot up,
he stated.
A $100 per barrel price would hit Europe hard — especially as the EU is preparing to take a critical step and fully cut itself off from Russian energy sources.
For now, the chances of Iran closing the Strait are moderate, Mate Toth noted. The US currently has four aircraft carrier strike groups in the region, with a fifth on the way. The UK has also indicated it is monitoring the situation closely.
Without risking direct confrontation and international escalation, Iran can’t close the Strait, so it’s not in its interest to do so until the very last moment. But things are heading in a direction where it may have no other option, he warned.
Since Friday, Israel has carried out targeted strikes showing that Iran’s defense capabilities and military strength are extremely limited,
he said, adding that other regional powers like Turkey and Saudi Arabia have certainly noticed Iran’s weakness.
This is such a significant loss in terms of the regime's survival and Iran’s regional power status that there may come a point where Iran has nothing left to lose and may take the risk,
Mate Toth said.
Multiethnic Iran is more fragile than it appears from the outside, he added. The conflict could escalate into neighboring countries, especially since Iran is surrounded by US allies and while it itself is left without allies.
If that happens, oil prices will explode.
As for Europe, recent geopolitical events over the past three years show not only that Europe has been diminished in global importance, but that the world seems to accepted this, the expert pointed out.
Europe is now watching from the sidelines, and in that sense, I’m sure it was caught unprepared and lacks both diplomatic influence and a plan for how to respond,
he said.
Nothing illustrates this better than the fact that, despite global developments, during Monday’s meeting of energy ministers in Luxembourg the focus was remained on accelerating the phase-out of Russian energy.
The meeting had clearly been prepared in advance, with no adjustment to the new reality. So not only is Europe not a key player in current events, it is flying blind,
Mate Toth underlined.
"The right decision would be to immediately halt the effort to cut off Russian energy, especially at such a critical moment when we don’t even know what’s coming in the Middle East,” he said, adding that even without Middle Eastern events, this strategy spells trouble for Europe and its economy.
The decisions being made in Brussels do not serve European interests in any way. For example, the EU is mandating a full phase-out of Russian natural gas, despite the fact that this puts not only Hungary but also Slovakia — which receives all its gas through Hungary — in a difficult position. Even some of Ukraine’s gas comes through Hungary, the expert highlighted.
Mate Toth warned that replacing Russian gas with spot market purchases instead of long-term contracts would immediately raise prices by at least 20 percent. Moreover, long-term contracts include massive penalties and compensation clauses for non-fulfillment, which would burden EU member states.
What Brussels should do now is immediately stop these incredibly self-destructive ideas that are essentially delivering a death blow to the European economy,
Mate Toth emphasized.
He added that fast-tracking Ukraine’s EU accession is another such dangerous idea.
Just think about it: Ukraine’s GDP is half that of Serbia’s, and Serbia has been waiting at the EU’s doorstep for twenty years,
he pointed out.
What is more, these ideas not only harm EU member states, but "as a kind of side effect, also damage the EU's institutional and legal framework." Brussels is undermining its own rules by attempting to push through the phase-out of Russian energy carriers as a trade policy measure, bypassing Hungary. The EU's founding treaties clearly state that decisions in common energy policy can only override member states’ authority if they serve the energy security of the entire EU — and clearly, that is not the case here, the energy lawyer explained.
Article 194 also states that the EU cannot infringe on the right of member states to determine their own energy supply and sources, Mate Toth added, emphasizing that the Von der Leyen–Zelensky plan violates this as well.
Brussels would have to make a complete U-turn in order to avoid destroying both its member states and the EU as a legal and institutional entity. Right now, it is pushing through ideology-driven decisions at such a cost that it threatens to collapse the EU’s entire legal and institutional system. It’s preparing to override its own decision-making mechanisms, its operating rules — even the rules in the founding treaties,
Mate Toth emphasized.
Cover photo: The Strait of Hormuz (Photo: AFP)
