The attack by the United States and Israel on Iran and the closure of the Strait of Hormuz represent one of the most dangerous scenarios for the global energy market. The Strait of Hormuz is a vital artery of global oil supply, and any disruption in this narrow passage immediately drives up the price of a barrel on international markets, triggers panic among traders and sets off a chain reaction of price increases worldwide.
At the same time, Gulf countries have come under Iranian missile attacks, shaking their energy sectors and directly affecting the rest of the world.
Bosnia and Herzegovina is not a direct importer of crude oil from conflict zones, but it is part of the global energy market. That is precisely where the core of the problem lies.
No Physical Shortages, but Price Increases Are Likely
The Foreign Trade Chamber of Bosnia and Herzegovina says that in the short term there are no signs indicating a physical shortage of fuel. The country does not import crude oil directly from the affected areas, and petroleum products are supplied through regional distributors and refineries in neighboring countries, meaning that an interruption of deliveries is not an immediate threat.
However, price increases and heightened market volatility are almost certain. Higher fuel prices at petrol stations have already been recorded, directly affecting both businesses and household budgets. If the war continues and develops into a broader energy conflict, higher energy and transport costs will inevitably follow, reducing profit margins for companies that rely on imported raw materials and creating additional inflationary pressure.
The Chamber warns that in the event of a wider energy shock, Bosnia and Herzegovina’s exports could fall by between three and seven percent, primarily due to reduced demand in the European Union. Inflation would also increase further.
The real risk for Bosnia and Herzegovina is not a disruption in supply, but a global rise in energy prices.
Bošković: We Share the Same Fate
Milenko Bošković, president of the Association of Petroleum Products Traders of the Federation of Bosnia and Herzegovina, says supply is currently more difficult but there are no shortages. He noted that although the Strait of Hormuz has been closed, Bosnia and Herzegovina is supplied through European Union countries.
“A certain level of stability can be guaranteed, but only until the point when potential limits on quantities for Bosnia and Herzegovina might be introduced,” he told Forbes BiH.
Bošković also warned about irrational reactions among some citizens who rush to petrol stations and buy fuel in additional containers. Such behaviour, he stressed, is driven more by psychological panic than by real necessity and could further destabilize the market.
Hadžić: The State Must Have a Rapid Response Mechanism
Economist Faruk Hadžić warns that Bosnia and Herzegovina must have a built-in mechanism for rapid response in the event of an energy shock. This refers to amendments to the Law on Excise Duties that would allow the Council of Ministers to temporarily reduce or abolish fuel excise taxes without lengthy parliamentary procedures.
According to his estimates, such a measure could cushion the impact of rising oil prices up to the level of 100 dollars per barrel, mitigating an increase of roughly 30 dollars compared to previous levels.
While this would not completely stop inflation, it could significantly soften the blow. In Bosnia and Herzegovina, increases in energy prices automatically lead to higher prices for almost all goods and services.
Hadžić warns that failing to adopt such measures could later cost up to five times more through budget adjustments and additional borrowing.
Saša Magazinović, a member of the House of Representatives of the Parliamentary Assembly of Bosnia and Herzegovina, has proposed a permanent legal mechanism that would allow the Council of Ministers to react immediately in the event of market disruptions by reducing or abolishing excise duties for up to six months within a single calendar year.
Unlike earlier attempts that failed due to political disagreements, this model allows for flexibility and rapid intervention without complex procedures.
At a time when global developments directly affect citizens’ living standards, the speed of reaction can be crucial.
Gas Stable for Now – But Linked to Oil Prices
Mirza Ustamujić, director of Energoinvest, told FENA that the supply of natural gas is not at risk and that the price set at the beginning of the year remains in force. Energoinvest has a long-term contract with Russia’s Gazprom based on the so-called oil formula, meaning the price is adjusted quarterly according to oil price movements rather than daily market fluctuations.
For now, this provides a certain level of stability for consumers.
However, Bosnia and Herzegovina relies on a single gas interconnection for imports, which remains a strategic risk. If oil prices continue to rise, this could eventually be reflected in gas prices in the coming quarters.
Inflation, Investment and Demography
A prolonged conflict and a closed Strait of Hormuz would mean more expensive energy, transport and production. This would reduce the competitiveness of Bosnian companies, increase risks for investors and further strain household budgets.
Nevertheless, Bosnia and Herzegovina does not have a strategic dependence on oil from war-affected countries. It does not import key food products from that region, and its energy system is not directly connected to the infrastructure there.
If the conflict remains regional and does not escalate into a broader energy crisis, the consequences for Bosnia and Herzegovina would likely be limited and short-term. However, if it evolves into a global energy shock, the effects would be felt through higher inflation, falling exports and slower economic growth.
At this moment, the biggest threat is not empty petrol stations but a chain reaction of price increases and the spread of panic. Bosnia and Herzegovina’s energy stability depends on three factors: the global development of the conflict, the state’s ability to react quickly with fiscal measures and calm communication with the public, Forbes writes.
