Portugal Fuel Prices Rise Amidst US-Iran Tensions

Portugal’s fuel prices have risen sharply, anticipating the impact of escalating tensions in the Middle East following recent military actions involving the United States and Iran. The increases, effective Monday, reflect a direct response to rising international oil prices, specifically a jump in the Brent crude index above $80 per barrel.

Fuel Price Snapshot

According to data from the Direção-Geral de Energia e Geologia (DGEG), the average price of diesel increased by 3.4 cents per liter to €1.63, reaching its highest level since late November. Special diesel saw a slightly larger increase of 3.7 cents, now averaging €1.658 per liter. Gasoline prices similarly climbed, with a 2.2 cent increase to €1.703 per liter for the standard grade. Interestingly, 98 octane gasoline, the most expensive fuel, experienced the smallest change, rising by just half a cent to €1.871 per liter.

While price adjustments typically occur on Mondays in Portugal, regulations allow for daily fluctuations, with each brand and filling station setting its own prices. Recent developments involving the use of the Lajes Base in the Azores by the United States, coupled with the broader geopolitical instability, appear to be driving the current price hikes.

The Ormuz Strait: A Critical Chokepoint

The immediate driver of concern is the situation surrounding the Strait of Hormuz, a strategically vital waterway connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. The Iranian Revolutionary Guard Corps initially declared the strait “closed,” threatening to attack any vessel attempting passage. While the U.S. Central Command (Centcom) later refuted this claim, the threat underscores the potential for significant disruption to global oil supplies.

The Strait of Hormuz is a narrow passage – just 33 kilometers (20.5 miles) wide at its narrowest point – and serves as the world’s most significant oil transit route. Approximately 20 million barrels of oil, roughly one-fifth of global daily production, pass through the strait each day, according to the U.S. Energy Information Administration (EIA). The EIA identifies the Strait as a “critical oil chokepoint.”

Mohammad Ali Shabani, an Iran expert and editor at Amwaj Media, told CNN that Iran’s geographic influence over maritime transport gives it the power to “cause a shock to oil markets, drive up oil prices, drive up inflation, and collapse Trump’s economic agenda.” The narrow shipping lanes within the strait require supertankers to navigate close to Iranian and Omani territorial waters, increasing vulnerability.

Regional Implications and Asian Demand

A closure of the Strait of Hormuz would disproportionately impact Asian economies, particularly China, India, and South Korea, which rely heavily on Middle Eastern oil. In 2024, these three nations accounted for 84% of the oil and 83% of the liquefied natural gas transiting the strait, according to the EIA. China alone imported 5.4 million barrels per day through the strait in the first quarter of 2025, followed by India (2.1 million) and South Korea (1.7 million). In comparison, the U.S. And Europe imported significantly less, at 400,000 and 500,000 barrels per day, respectively.

Portugal’s Position and U.S. Access to Lajes

The current situation has prompted scrutiny of Portugal’s role, specifically regarding access to the Lajes Base in the Azores by the United States. Portuguese Foreign Minister Paulo Rangel has clarified that Portugal granted a “conditional authorization” for U.S. Use of the base following the attacks on Iran, but emphasized that this authorization was granted under existing agreements governing overflights and landings, rather than a specific agreement related to the conflict. As reported by Expresso, Rangel stated that no requests for military intervention were received prior to the U.S. Action, and the authorization was based on standard procedures for state aircraft.

Rangel further explained that the authorization evolved after the U.S. Intervention, with three key conditions now in place for any U.S. Use of the base. He stressed that Portugal is not directly involved in the conflict and that no attacks originated from Portuguese territory. Euronews Portugal details the shift in authorization protocols following the commencement of military operations.

Potential for Further Price Volatility

The duration of the conflict and the stability of the Strait of Hormuz remain the key determinants of future oil prices. U.S. Intelligence estimates suggest Iran possesses approximately 6,000 mines – including drifting, magnetic, bottom, and anchored mines – that could be deployed in the strait, further exacerbating the risk of disruption. The situation remains fluid, and continued escalation could lead to further price increases at the pump for consumers in Portugal and globally.

What to expect in the coming weeks: Monitoring of the Strait of Hormuz will be critical. Any further disruptions to shipping, whether through direct military action or the deployment of mines, will likely trigger additional price increases. The Portuguese government will continue to assess the situation and adjust its authorization protocols for the Lajes Base accordingly, balancing its strategic alliance with the U.S. And its commitment to regional stability.