A further significant fuel price increase is expected if Iran follows through on its threat to block the Strait of Hormuz, a crucial shipping route through which about one-fifth of the world’s oil supply passes.
Tomislav Mićović, Secretary General of the Association of Oil Companies of Serbia, told RTS that such developments echo the sharp rise in oil prices after the outbreak of the war in Ukraine. He explained that oil trading does not occur over the weekend, so current prices reflect Friday’s close, with new prices to be confirmed later in the day.
“Markets in the Far East have already opened and started trading. Prices have only slightly risen, from about $74 to $75 per barrel—these are daily fluctuations and don’t necessarily indicate the final price by the end of the day. No one can predict what will happen,” Mićović said.
On Friday, Serbia saw a fuel price increase of two dinars per liter for both gasoline and diesel. Mićović clarified that this was not due to crude oil price changes, but because of shifts in refined product prices, which sometimes move differently from crude oil markets.
He noted that while crude oil prices ultimately influence derivative prices, the effect is neither immediate nor dominant. “If crude oil prices rise, derivatives tend to rise too, but with some delay. If prices stabilize, fuel prices might not change at all,” Mićović added.
The recent two-dinar hike is largely explained by rising gasoline and diesel futures over the past five days, independent of tensions with Iran.
Mićović highlighted that June typically sees increased travel and seasonal demand spikes. However, Serbia’s fuel market is regulated, with price caps in place.
“Our market isn’t fully free, which presents risks. No matter how much the government tries to simulate market realities, it’s impossible and unhealthy to fully liberalize prices. That creates business risks. Another specific risk for Serbia is sanctions threatening NIS [Naftna Industrija Srbije],” he said.
He also warned that Serbia cannot isolate itself from external influences. “About 20 percent of Serbia’s oil products are imported, which is significant. Even a one-percent shortage in derivatives causes major disruption,” Mićović explained.
Regarding the recent attack on Iranian oil facilities, Mićović confirmed that Iran continues to export crude oil despite tensions. Insurance costs for shipments have increased, but supply has remained steady for now.
Iran primarily exports to markets in China, Indonesia, Malaysia, and other parts of East Asia. Should Iran’s exports be cut off, these countries would need to seek alternative sources, creating global supply imbalances.
A major concern is Iran’s repeated threat to block the Strait of Hormuz if its oil exports are obstructed. Such a blockade would prevent Saudi Arabia and Kuwait from exporting oil through the strait, amplifying market disruption.
However, Mićović noted Iran has never fully blocked the Hormuz Strait. “The last major threat was around 2011 or 2012 due to Iran’s nuclear program and resulting sanctions, but the blockade never happened because it would also block Iran’s own exports. Iran also has alternative ports outside the strait in the Gulf of Oman, but they cannot fully replace Hormuz exports. So, the threat remains, but it’s complicated,” he concluded.
In summary, Serbia faces ongoing risks from global geopolitical tensions impacting oil supply and fuel prices. While the government maintains regulated fuel prices, external factors such as sanctions on NIS and instability in the Middle East continue to pose challenges to the Serbian fuel market.
