One Month Into the Hormuz Crisis, Portugal Confronts an Oil Shock That Goes Far Beyond Fuel Prices
It has been one month since the US-Israel military operation against Iran effectively closed the Strait of Hormuz, the narrow waterway through which roughly a fifth of the world's oil supply typically flows. Brent crude has surged past $112 per barrel, its highest level in over four years, and the consequences are now rippling far beyond petrol station price boards into sectors that most consumers rarely associate with oil.
For Portugal, a country that imports virtually all of its crude oil and refined petroleum products, the crisis represents a stress test of the national economy's resilience. The government's response so far, a 10-cent-per-litre diesel subsidy for professional and agricultural users running from April through June, is already being dismissed as insufficient by farmers, truckers, and industry groups who say it barely dents the real cost increase.
The everything crisis
What began as a fuel price shock is rapidly becoming something broader. Crude oil is a feedstock for thousands of products beyond petrol and diesel: plastics, fertilisers, pharmaceuticals, synthetic textiles, and the petrochemical inputs used in food packaging. As CNN reported this week, the disruption is cascading into sectors as diverse as kidney dialysis supplies, instant noodle packaging, and condom manufacturing.
For Portugal's agricultural sector, the fertiliser price surge is particularly worrying. Global fertiliser costs have risen sharply since the Hormuz closure, compounding pressures that were already elevated from the Russia-Ukraine disruption of recent years. Portuguese farmers, many of whom operate on thin margins in the Alentejo and northern interior regions, face the prospect of either absorbing higher input costs or reducing planting. The FAO's latest food price index, which hit a seven-month high in March, is expected to climb further.
Qatar's decision to halt helium exports, a consequence of broader Gulf disruptions, threatens semiconductor manufacturing globally. While Portugal's direct semiconductor industry is small, the downstream effects on electronics, automotive components, and medical devices imported into the country could become significant within weeks.
Europe's diesel problem is Portugal's diesel problem
Bloomberg warned this week that Europe faces diesel shortages by mid-April if the Hormuz closure persists. Shell has flagged potential fuel supply constraints as early as this month. For a country where diesel powers approximately 60 percent of the vehicle fleet, this is not an abstract risk. Portugal's structural diesel dependency means that any European-wide rationing scheme would hit Portuguese consumers and businesses disproportionately hard.
The government has already deployed a 600-million-euro credit line to help businesses manage soaring energy costs, and Brussels has warned that the bloc should prepare for a prolonged disruption. Diesel prices at Portuguese pumps have already risen by eight cents in a single week, and further increases are expected when next Monday's new price cycle begins.
Aviation fuel: the next bottleneck
One of the less-discussed consequences of the crisis is the looming shortage of jet fuel, or Jet A-1. The last tanker carrying aviation kerosene from the Persian Gulf is expected to arrive at Rotterdam by April 9, after which European supply chains will need to rely entirely on alternative sources. For TAP Air Portugal, already in the middle of a complex privatisation process, any disruption to fuel availability would add operational and financial pressure at the worst possible moment.
Portugal's airports, which handled record passenger numbers in 2025, could face knock-on effects including flight delays, route cancellations, and fuel surcharges that dampen the tourism season before it even begins. The Algarve and Lisbon, both heavily dependent on inbound tourism from northern Europe, are particularly exposed.
The policy response so far
The Portuguese government's fuel subsidy, activated on April 1, applies only when weekly diesel prices exceed the March 2 baseline by at least 10 cents, a threshold that has already been met. But the subsidy covers only professional diesel and coloured agricultural fuel, leaving ordinary consumers to absorb the full price increase. Spain's more generous 20-cent subsidy has drawn unfavourable comparisons.
Portugal has also joined four other EU nations in calling for a windfall tax on energy companies profiting from the crisis, a move that would take months to implement even if Brussels acted swiftly. In the meantime, the knock-on effects are already visible in rising Euribor rates and mortgage payments, as markets price in the inflationary pressure of sustained energy costs.
A month into this crisis, the question for Portugal is no longer whether oil prices will come down, but how many parts of daily life they will reshape before they do.
