MARKETS STUNNED - SCARY ROLLER COASTER FOR PRICES - INCREASES IN AIRLINE TICKETS - Filinews 11/3 by Angelos Angelodimou
Energy markets have been experiencing an unprecedented roller coaster in the last 24 hours, as a result of the abrupt changes they are experiencing due to the military conflicts in the Middle East. By Monday night, the price of oil had reached $119 a barrel, spreading terror in international markets about the effects that were expected to occur.
However, after President Trump's statement yesterday that the war in the Middle East could end soon, there was a noticeable correction in prices, as a result of which they fell as low as $88 per barrel. However, this was followed by an Iranian drone attack on the largest oil refinery in the Middle East, which is located in Abu Dhabi, as a result of which it stopped operating. Subsequently, news emerged that Exxon Mobil had decided to remove non-essential workers from its operations in the Middle East.
As it is understood, developments are changing by the hour, with the result that any estimates of the evolution of the crisis and related oil prices become precarious. Therefore, markets and economists are waiting to see where this rise and fall in oil prices will stop.
Fuel increases of up to 40%
Based on Monday's data, energy expert and Senior Associate / Senior Fellow at the Atlantic Council Chiaris Ellinas told KYPE that increases of up to 30%-40% in gasoline and diesel prices in Cyprus in the coming days are not ruled out. Mr. Ellinas noted that if the conflicts continue for weeks, prices could exceed $120 again, while theoretically they could approach $150 in an extreme scenario, although this would require a complete halt to oil exports from the Middle East, which he described as difficult. At the same time, he warned that attacks on energy facilities are intensifying uncertainty. As he explained, if refineries or natural gas and LNG production plants are affected, it will take about two to three weeks to get them back into operation.
For Cyprus, Mr. Ellinas estimated that within the current or next week, when new fuel imports are made, the increases will begin to be transferred to the market. "They have not increased, but I believe this week or next they will arrive because stocks will be depleted," he said.
We avoided the energy shock
Besides, speaking to "F", economist Tasos Yiasemidis said that so far we have avoided what we call an energy shock, since today (yesterday Tuesday) oil prices recorded a noticeable drop after Trump's statements, reaching at some stage 83-85 dollars per barrel. In fact, as he characteristically said, there were similar prices on 5/3.
However, he continued, the fact that the scene is still fluid and developments are changing hour by hour, no safe expectations can be made at this point. At the same time, he warned that if the Strait of Hormuz is closed for a long time, then it will certainly create a significant problem, and there will be an impact on the markets and economies of the affected countries.
Water is a critical factor
Mr. Yiasemidis touched on a particularly important issue, which, as he mentioned, may also determine the fate of the war. This, he said, is none other than the targeted strikes on desalination. Citing a Bloomberg article, Mr. Yiasemides noted that one of the most valuable goods in the Arab world is water. The CIA calls it "the strategic commodity" of the Middle East. The Persian Gulf is endowed with enormous hydrocarbon wealth, worth trillions of dollars. What the desert countries of the region do not have is water. From the 1970s onwards, petrodollars bought a solution: desalination plants. Today, the region relies on nearly 450 facilities to quench the population's thirst. About 100 million people live in the countries that make up the Gulf Cooperation Council - Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman - all of which are currently under Iranian attack.
Finally, asked about the impact on Cyprus, but also about the figure, which Eurostat pointed out yesterday, that 86% of the available energy in Cyprus came from crude oil and petroleum products, while the country imported 96% of its energy from petroleum products, he initially said that at this stage, there is no great concern, apart from the fact that the oil cargoes expected from a week, are likely to be more expensive than the previous ones.
In this regard, in relation to the issue of dependence on oil, he said that as an island and as a country where we import almost everything, the above is to be expected. Especially given that for years we had not developed a satisfactory network of renewable energy sources. A point, however, that has been improving in recent years with the increase mainly in photovoltaics.
Energy Dependent
It is noted that Eurostat announced yesterday that Cyprus has one of the highest rates of energy dependence on petroleum products in the European Union, according to the 2026 edition "Energy in Europe". More specifically, in 2024 86% of the available energy in Cyprus came from crude oil and petroleum products, while the country imported 96% of its energy from petroleum products, recording the highest dependency index in the EU. In the European Union as a whole, 43% of available energy in 2024 came from domestic production and 57% from imports.
Increases in airline tickets
Meanwhile, yesterday, the first effects of the rise in oil prices emerged, with some airlines announcing an increase in ticket prices. In particular, the increase in their fares, due to the conflict in the Middle East, was announced on Tuesday by the Australian Qantas Airways and Air New Zealand.
The Australian airline reports that airline prices have increased on Asia-Europe routes. Air New Zealand reports that it has increased economy class fares for domestic routes by 10 New Zealand dollars (6 US dollars), 20 New Zealand dollars on short-haul international flights and 90 New Zealand dollars on long-haul flights.
Hong Kong Airlines says it will increase fuel surcharges by up to 35,2% from Thursday, with the steepest increase recorded on flights between Hong Kong and the Maldives, Bangladesh and Nepal, where charges will rise to 384 Hong Kong dollars (49 US dollars) from 284 Hong Kong dollars. Cathay Pacific says it is reviewing fuel surcharges on a monthly basis. Vietnam Airlines has asked local authorities to scrap an environmental tax on fuel to help it maintain its operations.
