The price of Brent oil, the global benchmark for crude prices, traded close to $120 (€103) a barrel on Monday morning. It had dropped to below $90 (€77.60) a barrel by Monday evening as President Trump suggested that the war with Iran might be nearly over.

Tuesday brought more volatility. Oil dropped close to $80 (€69) a barrel, the lowest level since the war began, late in the afternoon when the US Energy Secretary posted on social media that a tanker had been escorted through the Strait of Hormuz by the US Navy. This, however, was denied by other US government sources and the Energy Secretary deleted his social media post. Oil started to rise again.

By Wednesday morning, a barrel of Brent crude was back around $90 (€77.50) a barrel. Shipping through the Strait of Hormuz, which carries a quarter of the world’s energy needs, remains effectively closed. There are reports that Iran could have started mining the critical sea passage, and of merchant ships being damaged trying to enter the area.

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We are now in the second week of the energy crisis which has been triggered by the joint US-Isreal attacks on Iran. There had been hopes at the outbreak of the shelling that it would be a repeat of the short exchange of fire in the so-called 12-day war between Israel and Iran in June 2025, which led to a brief jump in oil prices before they returned to their pre-war level. However, this conflict has become much wider in its impact on energy infrastructure in the region. The effective closure of the Strait of Hormuz is a significant escalation on any action taken in 2025.

The comments from Trump on Monday where he said that the aims of the attack on Iran had been largely achieved suggested that the president was trying to end the conflict.

Trump has developed something of a track record for announcing policies which he then reverses when financial markets react negatively. Investors call this the ‘Taco trade’ (Trump always chickens out). Monday’s comments were seen as an attempted Taco.

The apparent failure of that attempt lays bare the clear difference between reversing a mistaken trade policy and stopping a war with multiple countries involved. Trump might want the conflict to be over, but so long as Israel continues its attacks on Iran and Iran continues to disrupt the region, Trump’s words will have little effect.

If we cannot reopen the Strait of Hormuz, we will replace it with other oil coming from elsewhere and circulating around the world

Meanwhile, in Europe, politicians are pushing every button they have to try to reduce the effects of the surge in energy prices. On Wednesday the International Energy Agency prepared to release millions of barrels of crude from its stockpiles. French finance minister Roland Lescure said: “If we cannot reopen the Strait of Hormuz, we will replace it with other oil coming from elsewhere and circulating around the world.”

European Commission President Ursula von der Leyen told the EU parliament that the rise in oil and gas prices since the start of the conflict had cost an additional €3bn. She said that the EU “must deliver relief now”, and outlined options around better use of power purchase agreements, state aid measures, and exploring subsidising or capping gas prices. She also called on member states to take action on taxes and levies.

The price of European gas was trading at just below €50 per MWh at the time of going to print, well below the peak seen last week, but still 60% above levels which had prevailed in recent months.

Comment

The size of the impact of the conflict in the Middle East on Irish farmers and consumers is still dependent on how long hostilities continue. If there is a de-escalation in the coming days, then the spike in diesel and fertiliser prices will prove transitory.

However, the longer disruptions continue, the greater the impact will be. Stocks of fertiliser in Ireland were in a good place before the conflict broke out – there is some irony in the fact that worries about CBAM-driven price increases meant a lot of farmers had bought stocks ahead of the outbreak of the conflict. Those stocks will only last so long. Sean Coyle from Origin put the quantity available in Ireland at six-eight weeks’ supply at the start of the conflict.

If this turns into a longer conflict then there is also a growing risk that supplies will not be able to restart quickly once it is over. If infrastructure is damaged or destroyed then production of key outputs could take months, rather than days, to come back online. The knock-on effects of the supply shortages for fertiliser could be seen in global food prices for the rest of 2026.