Oil markets have witnessed dramatic gains on Monday, April 13, after President Donald Trump declared an immediate naval blockade of the Strait of Hormuz following the collapse of US-Iran negotiations.

Sharp rise hits global fuel benchmarks

Brent crude, the European benchmark, has jumped nearly 7.3 per cent in early trading to go over the $102 per barrel mark by the time European stock markets prepared to open. West Texas Intermediate (WTI) crude climbed even higher, rising almost 8.5 per cent to reach $104.70 per barrel. Such rapid moves reveal acute concerns over potential disruptions to roughly one-fifth of global oil supplies that normally transit the narrow waterway.

Traders reacted immediately to the news. Earlier uncertainty around a possible ceasefire and reopening of the strait had pushed prices lower, with Texas crude closing Friday at $96.57 per barrel after a 13 per cent weekly drop, making filling up at the pump feel a little more normal in the past few days. Monday’s reversal erased much of that optimism within hours.

Trump orders naval action after failed talks

In response to failed peace talks, Trump posted on his Truth Social that the US Navy would begin blocking every vessel attempting to enter or exit the strait with immediate effect. US Central Command (CENTCOM) confirmed operations would start at 3pm on Monday, and target all maritime traffic to and from Iranian ports.

“Effective immediately, the US Navy will begin the process to block all vessels attempting to enter or exit the Strait of Hormuz,” the president stated. This measure is planned to prevent Iran from disrupting flows first and profiting themselves in these heightened tensions.

Why the Strait matters for energy markets

The Strait of Hormuz serves as a vital artery for oil exports from the Gulf region. Any lengthy restriction risks severe supply shocks, higher fuel costs worldwide, and knock-on effects for inflation and economic growth. Analysts say that even short-term uncertainty can propel prices sharply higher, as seen in previous geopolitical flare-ups.

Markets are now bracing themselves for more volatility. Energy traders are monitoring developments closely, while consumers face the prospect of rising petrol and heating bills if the blockade carries on like this. Diplomats continue searching for de-escalation paths, yet Monday’s events go to show the fragile balance in the region.

US oil exports doing well

Meanwhile, US crude oil exports are rising to record levels with the ongoing Strait of Hormuz crisis, with analysts projecting volumes to reach around 5.2 million barrels per day in April and May 2026. Empty tankers continue to stream toward the US Gulf Coast in more numbers to load American crude for onwards shipment, particularly to Asian buyers looking for replacement supplies after Middle East flows collapsed.

Far from any slowdown, American oil is flowing out at historic rates precisely because of the blockade and restricted Gulf exports, with the trend accelerating following today’s developments.

Immediate impact on petrol and diesel prices

A $10 rise in Brent crude typically adds up to 3 to 6 euro cents per litre to European pump prices, depending on taxes, refining margins, exchange rates, and so on. Retail prices in Spain therefore stand to rise as much as €10 per average car tank. The rise might not be obvious for two or three days, making early in the week a good time to fill up.

Drivers across Spain have been enjoying slightly lower pump prices in recent weeks, thanks to the government’s emergency cutting of VAT on fuels from 21 per cent down to 10 per cent. But Ursula von der Leyen and the European Commission are none too pleased and might be readying a backlash against Madrid for incompatibility with EU rules.

Commission issues formal warning to Spanish authorities

Officials in Brussels sent a letter to Madrid at the end of March 2026, making clear that the EU VAT Directive does not permit reduced rates on fuel supplies. Commission spokespeople have stressed that while they understand the need to support households during energy shocks from the Middle East conflict, member states must respect harmonised rules to avoid distorting the single market. Spain should instead rely on excise duty reductions, which remain within permitted limits.

Madrid defends the temporary nature of the measure.

Spanish Finance Ministry sources described ongoing dialogue with Brussels as constructive and fluid. Government representatives insist the VAT reduction forms part of a broader €5 billion package approved via royal decree-law and applies strictly as a short-term response, not a permanent change. Authorities plan to keep the 10 per cent rate in place until its scheduled expiry at the end of June.

VAT on fuels set to revert automatically in July

Normal 21 per cent VAT levels will return on fuels from 1 July 2026 unless the government announces an extension or alternative support after reviewing economic conditions and energy prices. Consumers can therefore expect pump prices to rise again and be ready for the busy summer season, all else being equal, though global oil market volatility will also influence final costs. Recent modest drops in petrol prices show both the tax relief and short-term wholesale easing.

History shows repeated VAT tensions between Spain and the EU

Such friction marks another episode in a pattern of confusion over VAT application in Spain. During the Zapatero era, plans to further cut VAT rates on books, music and cultural goods met immediate resistance from Brussels, which blocked deeper cuts other than existing super-reduced levels. Past European Court of Justice rulings have also found Spain in breach on reduced rates for certain pharmaceuticals and medical devices. More recently, the Commission referred Spain to the EU Court for delays in transposing updated VAT directives on SMEs and other measures. These cases reveal ongoing difficulties in balancing national crisis responses with EU harmonisation requirements.

Potential fallout remains limited for now

No infringement proceedings have started yet, and both sides appear keen to maintain dialogue. Prolonged defiance could, however, risk formal legal action or EU fines in the millions. For drivers, relief at the pump continues until June, offering welcome respite from price rises linked to the Strait of Hormuz and Iran conflict crisis. Observers will watch closely whether Madrid adjusts its approach after June or looks for more flexibility from Brussels.

Shoppers can’t help but notice the rise in prices at the checkout. The escalating conflict in Iran is now inflating everyday purchases through higher costs on food, packaging and clothing, but how?

Rocketing prices of raw materials, oil, natural gas, aluminium and sulphur are driving these increases since they remain vital for manufacturing, creating plastic containers derived from petroleum and producing synthetic fibres such as polyester, as well as in fertilisers that are essential to harvests.

Preliminary March Consumer Price Index data landed like a cold shower after prices jumped 3.3 per cent, one full point above February levels because of petrol costs. Consumer organisations, including the OCU in Spain, have already sounded alarms following their calculation of a 1.58 per cent rise in the shopping basket during the past thirty days since the beginning of the war.

Representatives from the Spanish Federation of Food and Drink Industries are voicing serious worries about energy price effects together with operational difficulties caused by suspended shipping routes and redirected cargo that heighten logistical and commercial uncertainty.

Plastic packaging raw materials climb by up to 50 per cent

Direct pressure is now hitting production of containers for many consumed foods because petroleum-derived plastics are facing sharp cost increases. Plastic raw material prices are said to have risen above 30 per cent and in some cases reached 50 per cent. Manufacturing expenses are climbing accordingly.

Support for plastic processing firms across Spain counts as essential so they continue supplying containers required for food distribution and transport. Some are calling for mechanisms that offset cost rises and sustain industrial activity while pointing out that lightweight plastics exert a smaller final impact than energy or freight charges.

Fast fashion sector acts as early warning signal

Petroleum derivatives also feature heavily in textiles where Spanish giants Inditex and Mango operate. Materials such as polyester, nylon and acrylic appear in countless garments within fast fashion ranges.

Shoppers may begin to notice the effect in the aisles of fashion houses. Companies such as Inditex with their “just-in-time” manufacturing ethos, could begin to suffer from delays in the supply chain soon.

Fertiliser disruptions pose risks to agricultural output

One shortage that may radically affect the US’s war policy is fertilisers, but not before we have felt their impact at the supermarket. Needed to maintain field production and fight crop diseases, shortages will lower harvests and push food prices higher, especially with volatile trade barriers for exporters and importers.

Spain used 4.42 million tonnes of agricultural fertilisers throughout 2024, according to official records. The National Association of Fertiliser Manufacturers acknowledges that the Iran conflict will create a very significant global supply impact because the Strait of Hormuz ranks among the most strategic maritime chokepoints. Iran, Qatar, Saudi Arabia, the United Arab Emirates and Bahrain together account for half the world sulphur trade, 23 per cent of ammonia, 34 per cent of urea and 18 per cent of ammonium phosphates, all used in fertilisers.

The war in the Middle East appears to be far from over, and no matter how geographically far we may be from the frontline, where we will begin to feel it most is at the checkout.