Cyprus will not introduce precautionary measures in response to the Middle East conflict for now, Finance Minister Makis Keravnos said on Thursday, while Energy Minister Michalis Damianos signalled his ministry stood ready to intervene if unjustified fuel price increases or shortages emerged.
Keravnos, speaking on ANT1’s “Mera Mesimeri” programme, said Cyprus had already introduced anti-profiteering measures before the war broke out, and that the government’s economic team was assessing all available data.
He noted that one option discussed in Brussels in recent days was the release of EU member states’ energy reserves onto the market to increase fuel supply. He said no precautionary measures such as a fuel price cap were currently under consideration.
Damianos said the Consumer Protection Service was systematically monitoring Cyprus’s supply chain for goods and fuel. His ministry had the necessary tools for immediate intervention should prices or shortages arise that were not justified by real market conditions, he said, and was working closely with the Finance Ministry to monitor prices and assess potential support measures for citizens.
Eurogroup President Kyriakos Pierrakakis has said he is open to discussing measures, with protecting households and maintaining eurozone economic stability the priority, prompting a wave of measures across several European countries focused primarily on containing rises in fuel and food prices.
Economist and KPMG Cyprus board member Tassos Yiasemides warned of a domino effect stemming from disruption to the Strait of Hormuz that extends well beyond the energy sector.
The scale of the impact, he said, would depend on the intensity and duration of the conflict, which appeared to be taking a different course from the previous 12-day hostilities. Attacks on Gulf Arab countries including energy infrastructure had already been recorded, he said.
Rising energy prices were feeding through to broader inflation, Yiasemides said, with higher production, transport and industrial costs eventually passed on to consumers.
Central banks monitoring inflation would likely raise interest rates in response, making borrowing more expensive and dampening both consumption and investment.
On tourism, Yiasemides said geopolitical instability — particularly if international media continued to amplify a sense of danger around Cyprus — could reduce traveller confidence.
Tourist demand was especially sensitive to perceived safety, he said, and the current period, while not peak season, was an important one for bookings. He called for careful management of Cyprus’s image abroad, noting that a misleading picture of the country had been created internationally.
Sectors including tourism, shipping, investment, energy and household purchasing power were all expected to be affected, Yiasemides said, adding that the key question was whether the situation would remain temporary.
On Iran’s warnings that oil could reach $200 a barrel, Yiasemides described this as an extreme scenario, while noting that Iran was clearly attempting to inflict economic costs on the global economy.
Missile strikes had already targeted not only oil infrastructure but also desalination plants, he said, and threats had been directed at investment banks and major technology companies.
He added that the US president was clearly a supporter of low fuel prices and was expected to act to prevent such an outcome, with options including releasing strategic oil reserves or finding alternative transport routes such as shipments from Saudi Arabia and the United Arab Emirates via the Red Sea.