Alexela business development manager Tarmo Kärsna said fuel trading has been "exceptionally volatile" this week, with prices reacting quickly to global events.

Diesel briefly surged Monday to a record $1,591 per ton, then fell after U.S. President Donald Trump announced a five-day pause in attacks on Iran, showing how quickly the market can swing.

Between U.S. optimism on talks and Iranian denials, he added, conflicting messages only added to the effect.

Prices fell sharply by midweek, with diesel plunging $226 and gasoline $85 per ton between last Friday and this Wednesday, noted Terminal board member Alan Vaht. Since hitting that midweek low, however, prices have already rebounded, with diesel up $155 and gasoline $49 again by midday on Friday.

As the U.S.–Israeli war with Iran continues, Vaht said the initial spike was driven by Trump's threat to target Iran's power plants if the Strait of Hormuz was not reopened, while the pullback followed his decision to give Tehran more time.

Under de facto Iranian control, the strait — a key chokepoint for global oil shipments — remains largely closed, sending ripples through fuel markets worldwide.

Global risks, fierce local competition

In Estonia, fuel prices ranged from €1.97 to €2.16 per liter this week, and according to Kärsna, the global spike earlier this week didn't even fully reach local gas stations.

At the same time, the ongoing local price wars sharply lowered prices in more competitive areas.

By Tuesday, gas prices in these areas had dropped 16.5 cents per liter and diesel 18.5 cents, with further cuts into Wednesday. By Thursday morning, total declines reached more than 20 cents per liter before prices began to climb again.

Vaht said these shifts are highly localized in the most competitive parts of Tallinn and Tartu, meaning drivers can still find significantly cheaper fuel nearby.

Globally, supply risks are building. Kärsna said each week that tankers cannot pass through the Strait of Hormuz deepens shortages and keeps pressure on prices, especially in Asia and Australia.

Vaht said the impact is already visible there, with supply disruptions, long lines and panic buying in countries like Thailand and India, affecting farming and food transport. While Estonia is only seeing higher fuel prices, some parts of Asia are actually running out.

Outlook is grim

Europe is unlikely to face shortages, he added, as its refineries rely on Brent and U.S. WTI crude oil.

The outlook, however, remains uncertain. The U.S. and Iran are far from agreement, and recent tanker attacks in the Strait of Hormuz have added fresh tension, driving prices higher again.

Kärsna said current shortages are keeping pump prices 10–20 percent above February levels, and recent weeks show reliable longer-term forecasts simply aren't possible.

Vaht said even if fighting in the Middle East stops, recovery may take longer than expected due to widespread damage to oil infrastructure, including storage, refining and LNG facilities.

The scale of destruction and resulting global supply gap, he stressed, has effectively left the fuel market paralyzed.

The outlook is grim, Vaht warned, with the energy crisis potentially lasting through the end of the year.

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