Domestic fuel prices decline while global prices continue rising

During the latest adjustment on May 14, the Ministry of Industry and Trade and the Ministry of Finance reduced the retail price of E5RON92 gasoline by VND656 per liter to no more than VND23,134 ($0.88) per liter, while RON95-III gasoline fell by VND276 per liter to VND24,078.

Oil products also declined in this adjustment period. Diesel prices dropped by VND268 per liter to VND27,226 ($1.03) per liter, while mazut fell by VND587 per kilogram to VND20,585.

Experts said timely government intervention has helped maintain stability in domestic fuel prices over a long period. Meanwhile, concerns over escalating tensions between the U.S. and Iran have caused global oil prices to fluctuate sharply.

At the close of Friday, Brent crude futures reportedly settled at $109.26 a barrel, up $3.54, or 3.35%. U.S. West Texas Intermediate futures finished at $105.42 a barrel, up $4.25, or 4.2%.

Over the week, Brent has climbed 7.84% and WTI 10.48% on uncertainty over the shaky ceasefire in the Iran war.

Analysts at Commerzbank noted that the tone between the U.S. and Iran has once again become significantly more confrontational. While the ceasefire holds, hopes for a swift reopening of the Strait of Hormuz have faded.

Nguyen Anh Quan, an expert at Vietnamese brokerage DNSE Securities JSC, said the Strait of Hormuz handles around 20% of global oil shipments and is an extremely sensitive location. "If the strait remains closed, global oil supply chains could face severe disruption, putting direct pressure on fuel prices and triggering broader domino effects."

According to Quan, fuel is the “lifeblood” of transportation costs. When transportation expenses rise, distributors are forced to increase retail prices to protect profit margins. In agriculture, fuel accounts for 40-60% of farmers’ input costs. Urea fertilizer prices, which depend heavily on gas prices, also tend to rise alongside oil prices, leading to higher food prices.

Aviation, logistics sectors hit hardest

Experts believe transport and aviation businesses will face the greatest pressure if oil prices continue to climb.

At a recent event, Uong Viet Dung, director general of the Civil Aviation Authority of Vietnam, said fluctuations in fuel prices have affected both air travel demand and tourism.

"Operating costs in the aviation industry are currently under severe pressure from fuel prices, exchange rates, aircraft shortages, spare parts shortages, and global geopolitical instability. These factors directly impact ticket prices, market stimulation efforts, and the competitiveness of airlines," Dung noted

“After positive growth in the first quarter of 2026, by April the Middle East conflict had pushed jet fuel prices sharply higher, at times by more than 100%. Vietnamese airlines had to reduce flights to just over 20,700 in the month, nearly 5,000 fewer than the previous month,” he added.

From the business perspective, Dinh Van Tuan, deputy CEO of national flag carrier Vietnam Airlines (HoSE: HVN), said the global aviation industry has faced enormous difficulties due to fuel price volatility. Fuel prices have at times doubled or even tripled, severely impacting operating costs and pushing many airlines worldwide to the brink of bankruptcy.

“Every $1 increase in fuel prices adds roughly VND300 billion ($11.38 million) to Vietnam Airlines’s fuel costs. We hope the Middle East conflict ends soon so the aviation market can recover as it did in the first quarter. Vietnam Airlines recorded a profit in Q1, but Q2 and the first half of the year could turn into losses if the situation continues,” Tuan said.

According to Tuan, Vietnam Airlines expects oil prices to reach around $160 per barrel in June, far above the original plan of $85 per barrel, making June particularly difficult.

According to the airline’s Q1 financial statement, Vietnam Airlines recorded consolidated revenue of more than VND37.5 trillion ($1.42 billion) in the first three months of the year, up nearly 23% year-on-year.

Its net profit also rose nearly 30% to over VND4.51 trillion ($171.11 million). Although Middle East tensions began affecting global energy markets in March 2026, their impact on aviation was not yet fully reflected in Q1 results.

However, the airline executive warned that the business environment in Q2/2026 would become significantly more challenging as uncertainties surrounding fuel prices become more pronounced.

Fuel accounts for approximately 30-40% of airlines’ operating costs, meaning any fluctuation in oil prices has an immediate impact on operating expenses and business efficiency.

Shipping, logistics costs surge

The maritime transport and logistics sectors are also facing mounting cost pressures.

Tu Le, head of transport partnerships at a logistics company based in Ho Chi Minh City, said shipping rates from Vietnam to the U.S. have increased by about $400 per container slot.

“The new rates took effect on May 15 and may continue rising if geopolitical tensions escalate further and oil prices surge. Existing transport contracts signed earlier are not heavily affected, but companies preparing orders for the end of the year or next year could face major cost increases and must carefully calculate to avoid losses or disruptions,” he said.

According to Phaata, a logistics marketplace in Vietnam, security tensions in the Strait of Hormuz and the Red Sea continue to place significant pressure on the operational strategies of global container shipping lines. Shipping companies remain cautious in route planning and capacity allocation as risks of disruption along strategic maritime routes persist.

In this context, high fuel prices, tightly controlled shipping capacity, and additional surcharges such as emergency fuel surcharges (EFS), peak season surcharges (PSS), general rate increases (GRI), and freight all kinds (FAK) pricing continue to support higher spot freight rates.

Market observers believe shipping lines are likely to continue using blank sailings and capacity control strategies to maintain relative market scarcity, especially as shipping demand accelerates ahead of the summer peak season.

According to the latest data from Drewry - an independent maritime research consultancy, the World Container Index (WCI) rose 12% this week to $2,553 per FEU. The increase was concentrated mainly on the Trans-Pacific and Asia-Europe trade routes.

In particular, routes from China to the U.S. saw sharp increases as shipping lines imposed emergency fuel surcharges and peak season surcharges. Persistent space shortages and rising operating costs continue to put upward pressure on freight rates.

Spot rates from Shanghai to New York increased 14% week-on-week to $4,252 per FEU, while rates from Shanghai to Los Angeles rose 10% to $3,357 per FEU.

Drewry noted that carriers are maintaining strict capacity management on Trans-Pacific routes. Seven sailings are scheduled to be canceled next week alone.

Notably, shipping company Yang Ming recently announced a general rate increase (GRI) of up to $2,000 per FEU effective from May 15. Drewry expects additional rate hikes are likely in the near term.