The military conflict in the Middle East hit the Bulgarian consumer's pocket directly.
The massive Iranian attacks on American bases this morning and the subsequent naval blockade of the Strait of Hormuz caused panic on global stock exchanges. Since Bulgaria is entirely dependent on international oil prices, the effect goes beyond geopolitics and becomes a purely domestic economic crisis.
Experts warn that if the conflict is not brought under control in the coming hours, our country faces serious inflationary pressure.
Fuel price forecast at Bulgarian gas stations
Bulgarian drivers will feel the consequences of the missile strikes first. Oil market reacts swiftly to threat to Gulf supplies:
Crude Oil Surge: The International Benchmark Brent crossed the psychological threshold of $110 per barrel immediately after reports of Iranian ballistic missile activation. Reaction on the columns in Bulgaria: Economic analyses indicate that the prices of mass gasoline A-95 and diesel in our country will jump by 8 up to 14 eurocents per liter within the next 48 hours. Wholesalers are already recalculating their tariffs according to the new exchange realities. The effect on propane-butane (LPG): Since liquefied petroleum gas is a by-product of the processing of oil and natural gas, its price in Bulgaria will also increase by about 8-12%.Chain inflation: What else will become more expensive?
Fuels are the circulatory system of the economy. Any increase in the price of diesel is automatically reflected in the cost of almost every good and service in Bulgaria:
Transport and logistics: Delivery and long-distance transportation companies will be forced to raise their prices or introduce an additional "fuel" fee. This will immediately increase the cost of deliveries to end customers. Food products: Bulgarian agriculture and food industry rely heavily on transport. Bread, dairy products and meat are expected to increase in price by between 5% and 7% by the end of the month due to higher distribution costs. General inflation: The National Statistical Institute (NSI) is expected to report an acceleration in monthly inflation, which could threaten the country's long-term plans for financial stability and entry into the eurozone.The Nightmare Scenario: Double Blockade of Oil Roads
The biggest threat to the Bulgarian and global economies lies in the geographical location of the conflict. The Middle East controls two of the world's most important sea arteries:
Strait of Hormuz: Currently, tanker traffic has dropped to the critical three vessels per day due to the US-imposed maritime blockade of Iran. Over a fifth of the world's oil passes through this strait. Bab el-Mandeb Strait (Red Sea): Tehran has already ordered its allies – the Houthi rebels in Yemen – to prepare for a complete closure of the Red Sea. If this happens, shipping to the Suez Canal will be completely paralyzed. Global Deficit: The International Energy Agency (IEA) has expressed deep concern as the simultaneous blocking of both straits would stop over 25% of the world's oil exports. This could send the price of crude oil to unprecedented 140-150 dollars per barrel, which for Bulgaria would mean fuel prices over 1.79 leva per liter.
Sources of information: energy-bg.org, bloomberg.com, iea.org, fuelo.net