World on Brink of Oil Price Explosion Due to Middle East Conflict

The war in the Middle East could further increase oil prices, leading to serious economic consequences worldwide — and Hungary will not be spared either. In an interview with Magyar Nemzet, Oliver Hortay, head of the Energy and Climate Policy Division at Szazadveg, warned that if the conflict affects oil supply, prices could easily soar above $100, and rising energy costs could ripple through the Hungarian economy as well.

Photo: Peter Sipeki

The effects of the armed conflict in the Middle East are already being felt in global markets, but the most serious consequences may still be ahead. According to Oliver Hortay, the impact of the war on the oil market "primarily depends on how much the fighting affects — or is perceived by market players to potentially affect — the oil supply."

The conflict will impact Hungary as well (Photo: MTI/Gyula Czimbal)

As he noted, the price of Brent crude oil rose from $70 to $78 per barrel at the very start of the war, even though at that point only the geopolitical risk had increased.

If these risks become reality, the market may respond even more sensitively,

he warned.

The greatest threat is the potential closure of the Strait of Hormuz, one of the world’s most crucial maritime oil trade routes.

 About one-fifth of the global oil supply passes through this route. If Iran blocks shipping traffic there, prices could easily jump above $100,

Oliver Hortay pointed out.

"The market is already pricing in uncertainty, but if the situation deteriorates further, we could see a sustained price surge," Oliver Hortay warned (Photo: Szazadveg)

In addition, further risks could arise from Israeli strikes against Iranian oil infrastructure, or if the conflict spreads to other key oil-producing countries such as Saudi Arabia or Iraq. According to the expert, oil prices will depend on whether these threats remain only potential risks or actually materialize.

The Conflict Will Also Affect Hungary

Although Hungary relies more heavily on Russian crude oil, it cannot avoid the effects of global price shocks. Oliver Hortay pointed out that

even though Hungary’s supply is typically of Russian origin, global market movements still influence these purchases, because pricing is not independent.

Moreover, LNG shipments from the Middle East — particularly Qatar — play a significant role in the European Union’s gas supply. If these shipments were to be disrupted or become uncertain, natural gas prices could rise further on global exchanges.

EU energy markets are deeply interconnected, so rising prices will inevitably affect Hungary too,

 he explained.

Inflationary Effects and Energy Dependence

Rising oil prices directly affect fuel prices, but the indirect effects are also significant. As transportation costs rise, the price of virtually all products increases — and over the medium and long term, this can fuel inflation.

Oliver Hortay emphasized that 

the energy crisis has shown that energy carriers — especially oil — play a key role in the development of inflation. Both the EU and Hungary are energy importers, so rising global prices exert a direct negative impact.

This is the Strait of Hormuz, one of the world's most important oil chokepoints. pic.twitter.com/Gc7fZrXj6Y

— Geography Host (@geographyhost) June 14, 2025

It All Depends on the Outcome of the War

Ultimately, the duration and severity of the market impact will depend on how quickly and in what way the conflict reaches a new, more stable point. "If the parties reach an agreement and the energy infrastructure remains intact, then market reactions will be temporary. But if the fighting drags on and the oil market becomes a direct target, we must prepare for lasting consequences," summarized Oliver Hortay.

Cover photo: Illustration (Source: Peter Sipeki)