Middle East Conflict Pushes Global Oil Prices Higher
Cambodia is bracing for a possible 13 percent increase in fuel prices as global oil markets react to escalating conflict in the Middle East. Military attacks involving Iran, Israel and the United States, along with disruptions to the Strait of Hormuz, have sent shockwaves through energy markets. According to the BBC, oil prices jumped by 10 percent to 82 US dollars per barrel on Monday after missile launches across the region that began over the weekend. Iran has since blocked vessels from transporting or travelling via the Strait of Hormuz, a strategic waterway responsible for delivering about 20 percent of the world’s oil and gas supply. At least three ships were attacked near the straits, further intensifying concerns about supply disruptions.
Cambodia Faces a 13 Percent Fuel Price Increase
Analysts warn that these global developments will directly impact Cambodia, which relies entirely on imported fossil fuels. A projected 13 percent increase would push gasoline prices up by around 500 riel per litre, raising the cost from the current 3,850 riel to approximately 4,350 riel per litre. The increase is expected to take effect once existing fuel stocks run out and new shipments arrive at higher international prices. As Cambodia does not produce oil domestically, it remains highly exposed to external price shocks and supply chain disruptions.
Temporary Relief Measures and Government Intervention
Kampuchea Tela confirmed that gasoline prices at its stations are determined by international market rates. However, to ease the burden on citizens, Prime Minister Hun Manet ordered the continued reduction of retail gasoline prices by 6.5 US cents per litre or 250 riel per litre. As a result, gasoline prices at Tela stations are set to remain at 3,850 riel per litre, equivalent to 0.96 US dollars per litre, between March 1 and 10, 2026. The company noted on its Facebook page that prices could increase once current inventories are depleted. This temporary buffer provides short term relief, but it does not eliminate the risk of future price hikes.
Experts Warn of Prolonged Impact
Chey Tech, a socio economic analyst, explained that the conflicts in the Middle East as well as the ongoing war between Ukraine and Russia are placing immense pressure on global energy supply chains. “The Strait of Hormuz, which is a transit point for about 20 percent of the world’s oil, has been cut off by Iran. As a result, global oil prices are rising between 10 and 13 percent, which will clearly affect Cambodia,” he said. He cautioned that if the conflict drags on, fuel prices could reach an “unimaginable cost”. He also stressed that Cambodia should prepare for multiple scenarios given global uncertainties.
Royal Academy of Cambodia economics researcher Ky Sereyvath shared similar concerns. He noted that while the government’s use of existing fuel stocks helps stabilize prices in the short term, this strategy has limits. “The utilisation of the existing stock to maintain the stability of gasoline prices is a good thing as it does not result in citizens spending more on gasoline. [But] if the stock is running out and the war in the Middle East [continues], we will not be able to keep the same price. Therefore, we have to be prepared for the sharp increase in gasoline prices in the future,” he told Kiripost.
What Businesses and Cambodians Should Do Now?
With fuel costs likely to rise, businesses and households must take proactive steps to manage expenses. Companies that depend heavily on transportation and logistics should review their cost structures, improve fuel efficiency, and consider adjusting pricing strategies carefully to avoid sudden shocks to customers. Diversifying suppliers and optimizing delivery routes can help reduce fuel consumption. For ordinary Cambodians, reducing unnecessary travel, carpooling, maintaining vehicles properly, and planning fuel purchases wisely can make a meaningful difference. Businesses may also explore alternative energy options where feasible, such as solar power, to offset rising operational costs. On a broader level, Cambodia can strengthen fuel reserves, enhance supply chain resilience, and accelerate renewable energy development to reduce long term vulnerability to global oil volatility.
Conclusion
The anticipated rise in fuel prices highlights how closely Cambodia’s economy is tied to global events. As tensions in the Middle East disrupt major oil transportation routes, the ripple effects are being felt far beyond the region. While temporary government measures offer short term stability, both businesses and individuals must prepare for potential increases once current fuel stocks are exhausted. Careful planning, improved efficiency, and strategic policy responses will be essential to weather this period of uncertainty and protect livelihoods in the months ahead.