Clyde Caruana pledges energy subsidies to remain amid Iran war oil price volatility

Finance Minister Clyde Caruana assured that the government’s energy subsidies will remain in place regardless of fluctuations in oil prices following the escalation of tensions in the Middle East. 

“The current government policy of energy price stability will remain in place. Such stability is especially important during these times of uncertainty,” the Finance Minister told BusinessNow.mt 

Asked whether the budget estimates may need to be adjusted, he said it is still too early to assess the additional cost arising from recent developments.

Global oil prices surged today amid growing tension in the Middle East, following joint US-Israeli strikes that killed Iran’s longstanding leader Ayatollah Ali Khamenei, and Iran responding with attacks against UAE, Qatar, and Kuwait. 

Brent crude, the global benchmark for oil prices, is currently trading at just under $80 a barrel, its highest level since January 2025.

Greater concern surrounds the Strait of Hormuz, where international shipping has slowed to a near-standstill in light of the attacks. Around 15 million barrels per day of oil and 80 million tonnes of LNG passed through the Strait last year, and oil prices could surge further if it effectively closes down.

Malta’s energy subsidies were introduced in 2022 to insulate consumers and businesses from higher electricity bills as a result of spiking energy prices.

Malta budgeted €172 million on energy support measures for 2026, slightly more than the €152 million it is estimated to have spent in 2025 but lower than the €183 million it spent in 2024. 

Cover photo: Clyde Caruana