International energy prices remain elevated, with markets unconvinced by efforts to boost supply and searching instead for credible long-term solutions before pricing oil and refined products lower.
Despite coordinated government interventions and the release of strategic reserves, Brent crude continues to trade above $100 per barrel, reaching multi-week highs.
Even the gradual recovery of cargo flows from the Middle East has failed to ease pressure on prices. Shipments from Gulf states have reportedly climbed to 15.5 million barrels per day, recovering more than 80% of pre-war levels, yet prices remain stubbornly high.
At the same time, shipping through the Strait of Hormuz remains costly and risky, while physical crude markets, including North Sea cargoes, continue to experience severe supply tightness.
Impact on Cyprus
The situation means fuel prices at Cyprus petrol stations are highly likely to increase further.
Higher energy costs are also expected to push up electricity prices.
Against a backdrop of growing inflationary pressure, calls are mounting for additional support measures.
Both DISY and AKEL argue that the government's measures announced last week are insufficient to address the scale of the problem.
DISY said the recent measures were positive but could not by themselves offset an estimated €1 billion cost-of-living burden for 2025.
“The government must proceed with clear priorities and realistic timelines. Investments require time, which means delays come at a cost,” the party said.
AKEL's head of energy policy, Vakis Charalambous, argued that the measures announced fail to match the scale of ongoing increases.
“The measures do not address the magnitude of the problem in practice. They are limited compared with the increases and leave a large part of low- and middle-income households exposed,” he said.
“Solutions exist. Possibilities exist. What remains to be seen is whether there is the political will.”
Geopolitical tensions driving markets
No meaningful easing of geopolitical tensions is currently visible.
On the contrary, recent developments have intensified concerns among analysts.
In the Middle East, military confrontation involving the United States, Israel and Iran has continued to escalate, accompanied by a stronger US naval presence and attacks on energy infrastructure.
Speaking in London, Saudi Aramco chief executive Amin Nasser warned that global oil inventories are at “dangerously low” levels, claiming that nearly three billion barrels have been removed from supply during seven months of conflict.
According to Nasser, rebuilding commercial and strategic reserves could take as long as two years, even if hostilities ended immediately.
Ukraine conflict adds pressure
The international outlook has also been affected by renewed escalation in eastern Europe.
Russia has launched further missile attacks on Kyiv, targeting key civilian and government infrastructure, while Ukrainian President Volodymyr Zelenskyy has signalled additional retaliatory strikes against Russian energy facilities and refineries.
These developments increase the risk of further disruption to Russian oil and gas supplies, reducing expectations of any meaningful correction in global energy prices.
Pressure on European markets
The effects of the energy shock are already spreading through international financial markets.
Persistently high fuel costs, combined with a broader sell-off in eurozone government bonds, particularly French 10-year debt, pushed the euro to a 17-month low against the US dollar on Monday.
The weakening currency adds another layer of pressure for European importers and energy consumers as governments continue to grapple with inflation and energy security concerns.
