Fuel, energy prices expected to remain despite Hormuz Strait reopening

Prime Minister Rob Jetten cautioned that the impact on energy prices could be felt in households for many months, even after the Middle East ceasefire. “We shouldn’t underestimate this,” he said. Energy firms have also warned that although the ceasefire is a positive development, it will take a while before the market becomes stable again.

Energy costs jumped significantly following the outbreak of the conflict with Iran over a month ago. In response, the government began developing a set of measures to soften the impact on households and companies. Prime Minister Rob Jetten said the Cabinet will continue pursuing these efforts.

"Even if the ceasefire manages to hold, the past weeks have caused extensive destruction. Energy prices will also remain high for some time. I therefore do not rule out that the impact of this war will be felt for a long time," the prime minister stated. On Wednesday, oil prices plunged significantly once news broke of a two‑week truce agreed between the U.S., Iran and Israel.

Energy firms say reopening the Strait of Hormuz would be a positive development, helping to curb further increases in gas prices. Still, according to industry group Energie-Nederland, the effects of the war will continue to be felt for a considerable time despite the ceasefire between Iran and the United States.

The sector says that extensive damage has been done to energy infrastructure in the Middle East. “Even if peace follows, the consequences will linger in the energy market, as key facilities must be restored and uncertainty remains over how quickly and fully shipping can restart.”

Household gas prices for new fixed-term energy contracts have surged significantly in the past month, data from regulator ACM show. For an average household, this amounts to almost 400 euros more per year compared with last month, based on an annual usage of 800 cubic meters of gas and 2,550 kilowatt-hours of electricity.

Variable-rate contracts have largely stayed unchanged for now, but the ACM anticipates that many households with such contracts will see their rates rise in the near future.

ACM board member Manon Leijten noted that the number of people immediately impacted by high energy contract prices remains relatively small. “However, the future of the Middle East conflict is uncertain, and we cannot predict energy prices in the months ahead. The current price increases are already creating significant worry. It is therefore positive that the government is considering targeted measures to prevent vulnerable households from sliding further into poverty.”