The conflict is far away. The consequences are not.
When news about tensions in the Middle East appears, we tend to look at it from a distance. It seems complex, geopolitical, and sometimes even unrelated to us. But there is a fairly mechanical chain that connects what happens there with what you pay here: at the gas station, at the supermarket, on your electricity bill, and even on your mortgage payment.
Let me explain it step by step.
The Strait of Hormuz
Imagine a water corridor about 40 kilometers wide trapped between Iran and Oman. Every day, nearly 20 million barrels of oil pass through that corridor. That’s roughly one out of every five barrels consumed on the entire planet.
If this passage were to close — or even if markets simply perceive that it might — the price of crude oil would surge. And when the price of crude oil surges, the entire economic system feels it. Oil is like the blood of the global economy: when circulation is restricted, the whole body reacts.
There doesn’t even need to be a declared war. Uncertainty alone is enough.
Gasoline: the first place you notice it
The connection between a war thousands of kilometers away and the price at the pump is direct and fast. When geopolitical tensions rise, financial markets anticipate a possible shortage and start buying crude oil just in case. This pushes up the price of Brent — Europe’s benchmark barrel — and within days oil companies pass the increase on to the price per liter.
Some analysts estimate that the barrel could reach 100 or even 110 dollars in a major escalation scenario. At those levels, filling a 55-liter tank could cost up to 15 euros more than it does today.
Does that seem small? Do the math: if you fill your tank once a week, that’s up to 720 euros more per year. Without changing any habits. Without buying anything new. Simply because the world has turned upside down.
The domino effect: from the tank to the supermarket
But the problem doesn’t stop at the gas station. This is where something comes into play that many people don’t see until it appears on their grocery receipt.
Oil is the invisible ingredient in almost everything you consume. Think about the bread you had for breakfast today. It required a tractor to plow the field, a truck to transport the wheat to the mill, energy to grind it into flour, another truck to bring it to the bakery, and another to deliver it to shops. This entire chain runs on fuel. When fuel becomes more expensive, every link in the chain becomes more expensive too. And someone pays for it. You already know who — us.
Expensive energy affects factories (which pay more for electricity), farmers (who pay more for fertilizers), logistics, and distribution. The result is widespread inflation: food, clothing, appliances… anything that has to be produced or transported becomes more expensive. And not just in one category — in all of them at once.
The electricity bill
The European electricity market works in such a way that natural gas sets the marginal price for all electricity. This means that even if most of our energy comes from wind or solar power, when gas becomes more expensive, electricity bills rise as well.
In other words: it doesn’t matter if we have solar panels on the roof. If gas prices rise because conflict disrupts supply routes, the bill at the end of the month goes up with them.
We already experienced this in 2021 and 2022. It wasn’t pleasant. And it could happen again.
The connection with your mortgage
This is where things get truly complicated. If energy becomes more expensive → inflation returns. If inflation returns → the European Central Bank raises interest rates to slow it down. If rates rise → the Euribor rises. If the Euribor rises → variable mortgage payments increase.
This happened not long ago. Between 2022 and 2023, the Euribor jumped from zero to 4%, and many families saw their monthly payments increase by 300 to 400 euros. Now that it had started to fall and many households had begun to breathe again, a new energy shock could reverse that trend.
So a war in the Middle East could end up costing you money every month simply because you have a variable-rate mortgage in Catalonia and someone fired a shot on the other side of the world.
Other side effects
Beyond the immediate effects, there are several collateral consequences worth keeping in mind.
Stock markets tend to fall when there is geopolitical uncertainty. If you have a pension plan or part of your savings invested, you might notice it in your portfolio. It’s not necessarily the time to sell — in fact, it’s often the wrong time — but it is important to be prepared for volatility.
Tourism and aviation also suffer. Aircraft fuel is derived from oil, and when it becomes more expensive airlines pass the cost on to ticket prices. For a country like ours, where tourism plays such a major role, higher air travel costs can reduce visitor numbers, affecting jobs and economic activity. Everything is connected; pull one thread and many others begin to move.
Inflation that seemed under control
2025 was a relatively good year in terms of inflation. It had approached the 2% target set by the European Central Bank, and interest rates had started to fall. Many people finally felt some relief.
A strong energy shock could erase that progress in a matter of months. And inflation doesn’t affect everyone equally: lower-income households spend a much larger share of their income on basic needs — food, heating, and transportation. For them, the impact is disproportionate.
So what can I do?
If you have a variable-rate mortgage, this may be a good time to consider negotiating a switch to a fixed rate while interest rates have not yet risen again. That window can close at any moment, and once it closes it is very difficult to reopen.
Review your electricity bill. Compare tariffs, check whether your plan really fits your consumption, and consider switching if necessary. A small effort can lead to meaningful savings over the year.
Strengthen your emergency fund. In times of volatility, having accessible cash is the best defense. It’s not a luxury; it’s the foundation of any financial strategy that works. Without a cushion, any unexpected event can destabilize you.
If you have invested savings, remember that energy crises create volatility — and volatility can be an opportunity for those who keep a long-term perspective. But it is not the moment to make financial decisions out of panic. Stay calm, analyze the situation, and if necessary consult a professional.
War may seem very far away. Your wallet is very close. Understanding the connection between the two is, ultimately, the first step toward making sure circumstances don’t end up managing your finances for you.
