Balkans hit by oil shock as war on Iran escalates

Welcome to TRT World. I'm Naja Mui and in this week's Across the Balkans, we bring you the latest stories from the region and how countries, governments, and the people are affected. Iran continued to carry out strikes on Israel despite US President Donald Trump signaling potential peace talks to end the three-week conflict. The fallout has sent shock waves far beyond the Middle East. In the Balkans, competing alliances are shaping varied responses the crisis as countries now grapple with the potential economic fallout. Adamu explains. Like other governments across the globe, Balkan nations are having to take stock of the conflict's impact on their economies. Analysts warn that the global energy crisis triggered by Iran's closure of the Strait of Hormuz, a vital artery for world markets is the largest in history. In March, Serbia's President Alexander Vultich announced two cuts to Serbia's crude oil duties, bringing the total reduction to 60%. Belgrade had already maintained a price cap on diesel fuel since 2022 and is now hoping Russia will still be a major leverager. as Slovenia's ruling Liberal Party clinched a narrow victory in parliamentary elections. It ventured into a new terrain by becoming the first EU country to introduce fuel rationing. But it's also a bid to crack down on what the country calls fuel tourism, where drivers from neighboring countries like Austria are taking advantage of Slovenia's lower regulated prices. Under the new measures, drivers are allowed to purchase up to 50 L per day at a single station. Legal entities and the self-employed, including those in agriculture, are limited to 200 L. But the impact isn't just economic. Across the Balkans, anti-US and anti-Israel protests have erupted. In Athens, thousands hit the streets, fearing that this latest escalation in the Middle East could mirror the devastation of past wars. supporting the protesters call for restraint. Greece's participation is confined to the European Unionled protection of shipper lanes rather than engaging in military action. While Greece keeps a cautious distance, Albania has escalated pressure on Iran. It has a troubled history that includes a 2022 cyber attack. Tana has now designated Iran's Revolutionary Guards a terrorist organization and Iran as a terrorism supporting state. air on it. — Trump said the US is engaged in talks with Iran with reports of a 15-point plan to end the war, curb Iran's nuclear program, and ease sanctions. Iran's military has denied this. The UN and world leaders are urging an immediate ceasefire while the Balkans, like the rest of the world, know the stakes for peace are high. Adamu across the Balkans. The Middle East conflict is sending shock waves far beyond the front lines and the Balkans are feeling the strain. From surging energy costs to deepening economic uncertainty, pressure is building across the region. I spoke with Dr. Shawn Michael Cox, senior adviser at the Global Policy Institute in Washington DC, about what it all means. We break down the growing risks from migration pressures to rising political tensions and what Balkan leaders must do

now to prepare for what comes next. Professor Cox, uh, welcome to Across the Balkans. It's a pleasure to have you here with us. — Thank you for inviting me. Uh, so how does the current conflict in the Middle East affect energy prices and economic stability in Balkan countries? — Well, globally, of course, energy prices, we've seen that they've increased since this conflict started. But if you're focusing and zooming in on the Balkans themselves, most of the Balkan countries on average get about 80% of their oil and their natural gas from abroad. And the impact of this conflict with Iran and the ability to transfer this energy from the Middle East to the Balkans has been significantly impacted. For example, the closing of the straight of Hormuz, which you know 20% of the world's energy moves through there will have a very significant impact the longer that this conflict uh goes on. I mean, we have already seen prices increase between 40 and 50% for energy costs. And in countries, particularly in the Western Balkans, that don't have particularly diversified forms of energy, it will have a significant impact. — Yeah. Are the Balkans especially at the risk from global economic problems caused by this conflict and how those countries can actually prepare? Well, they are at a certain amount of risk because the Balkan states tend to be reliant on one main partner and that is the EU for a lot of their economic development, for their social development, their political development support. I mean, as countries have joined the EU like Croatia, as they've gotten candidacy, they have instrument for pre-exession funds that help them do infrastructure work, but that only comes from one source. And if these sources are diverted to other means, that means the ability for the Balkan states to continue their same level of development gets hindered by this. And overall, I mean, we see um things like higher levels of unemployment, especially youth unemployment in the Balkans, in particular in the Western Balkans. and the type of funding uh that is provided by external communities like the European Union formerly like the United States as well, those went into programs that would help mitigate things like youth unemployment or you know unemployment for recent graduates. And again, if these funds are diverted to other instances like conducting this war, this conflict, you know, buying weapons, increasing defense, then that means there's less of the pie to be going to the Balkans. So, um, the levels of development that we've seen, especially over the last decade, will start to slow down. Uh could the Middle East conflict see the people in Balkans become more extreme or cause some more divisions uh in society? — There is definitely going to be an increase in the division of opinion. Will that be realized in society as a whole is a very big question and it depends on individual countries. For example, in in Bosnia, we have mixed communities there. And we've already seen in social media, for example, the leadership of the Republic of Serpska has already um they've taken a very close line with the United States and with Israel. But we've seen other groups that have supported um Iranians and different Muslim groups. So, at least on social media, as far as it goes, we've already started to see an increase in conflict amongst the different sides. If you go into a country like Serbia as well, it's not just what's going on in the Middle East, but it's also still what's going on in Russia and Ukraine as well. So, the divisions are all over the place in the Balkans. And the responsiveness within the Balkans by different communities to these divisions historically has been an increased level of conflict. Now, will it go from rhetoric and just talking about these conflicts or to actual physical conflict? It's hard to say. I mean, historically speaking, yes, that's what we're likely to see. But there have been a lot of efforts especially by governments to mitigate the effects of regional conflict of ethnic conflict of cultural conflict. — We don't know how those will pan out. This is something that definitely we need to keep an eye on. — Thank you. Could the Middle East conflicts cause more people to migrate to Europe and how would the Balkans be involved? Can we see the scenario of the 2015 maybe again? — Um, honestly it depends on how the conflict goes. If it is sustained conflict, if it's longer than 6 months to a year, we will start to see um migration, you know, forced migration or

unintended migration, whatever terminology you want to use. — But the biggest key here is what role Turkey will play in that. And you know, Turkey is sort of the land barrier. If they allow these migrants through who are fleeing the conflict, then yes, they're going to go right through, especially, you know, the Western Balkan pathway. I mean, that's a reason they call it the Western Balkan pathway because it's the easiest way to get into the EU. It will definitely we will definitely see an increase but that could also lead to conflict between EU member states that are bordering this region and but it can also to a certain extent give leverage to these countries as well saying you know we're hosting all of these refugees where we have these refugees coming through here how can you help us and what are you going to do to be able to help us — for the short term there's really nothing to worry about in terms of the conflict but if it gets to a situation maybe like Iraq light if I could use that term where they talk about boots on the ground then definitely that will happen but currently the way that this conflict is being uh carried out there's not an immediate concern for an increase in immigration — uh Kosovo quickly supported US and Israel while other Balkan countries mostly followed the European Union could global conflicts weaken the EU's unity and its influence uh in the Balkans over time. — Absolutely. Again, I mean, we we're already seeing that because the European Union is not really presenting a unified front. They don't have a way of communicating their interest as a community. We have different countries. Hungary supporting the United States very strongly where Germany and France are saying, "Let's take a more measured approach. " And so when citizens in Balkan countries are looking at their biggest patron, their biggest supporter, not being able to present a unified front on this or unified position on how to understand how to address the conflict itself, that definitely has a negative impact on the perception of the EU in the Balkans. And you know, we have every Balkan country is in a different stage of the EU accession process. Some have started negotiations. Most are candidates. Some have not. Like Bosnia, for example, has not yet started the negotiation process. And being able to trust in this organization that they're going to do right by you if they can't do right by somebody else and present a united front is that the overall opinion I think will decline about the efficacy of the EU and the role that they play and their patronage. So uh what would be your key advice for the political leaders in Balkans countries? How they should behave to protect their countries? — So the two things that come to mind in when you ask me this question is the first in political science we call it pragmatic hedging. — You don't want to put all of your eggs in one basket. And for too long the Balkan countries have been looking uh at the European Union as their basket. This is a perfect example of why you can't be doing that. That you need to be able to diversify your um your connections with other surrounding countries. You need to be able to diversify, for example, sources of energy. You need to be able to diversify your economy. You need to be able to um diversify the resources internally that you're exploiting, whether they're natural resources, service industry uh resources, the people themselves is all. You don't build up anything into uh you know in into one thing and hope that one thing is going to take off. What you need to do is spread the risk and spread the reward around. And again this is a great opportunity for Balkan countries to do this. So you have diversification. Also you have to build strategic connections locally. The Balkan countries have a very long history together. Not all of it's positive unfortunately. That's a — Yes. and they need to be able to communicate with one another because for let's take energy for example as I'd mentioned earlier up to 80% of energy resources come from outside of the region and if one country is having difficulty in reaching its energy needs then if you have u you know a strengthened Balkan network energy network or energy grid then you could share that energy with one another and then you could mitigate um any problems that happen because the fact of the matter is that if we see a problem in a country like Bosnia, it doesn't stay just in Bosnia, it will affect Montenegro, it'll affect Croatia, it'll affect Serbia. We have these spillover effects. So by cooperating and by strengthening the relations in a

bunch of different areas, then you only strengthen the group as a whole. And that doesn't mean you have to, you know, subsume your own identity, whether it's cultural, political identity, something else. that that's a very 20th century concept of doing this. The EU has shown us that you know taken in moderation honestly that you can work out agreements that are beneficial to everyone. What this actually is, I think, is a very good opportunity for the Balkan countries and particularly those that had former association in Yugoslavia to work together because this to realize we need to start cooperating more effectively with each other and reducing our reliance on the EU or on the United States or on foreign donors because we have everything that we need at least for the most part here. We just need to be able to communicate better and talk about it better. Professor, thank you so much for this conversation and for your time — and thank you for having me on the show. — Salaries and pensions in Serbia have been rising in recent years, but they remain far below the European average. The Vienna Institute for International Economic Studies estimates it could take Serbia decades to reach the living standards of European Union countries. That's if the economy continues to grow at the current pace. So why is the gap with Europe still so pronounced? Yella Milutino reports. — Belgrid's markets are full of fresh food, but for many pensioners, modest incomes mean every purchase has to be carefully planned. — Filipovich, a former retail worker, now receives a pension of around $346 a month, just enough to cover the bills. Even with two pensions, many struggled to maintain a comfortable life. Numerous pensioners say painstakingly managing their expenses has become an integral part of their daily routine. nonstop. The statistics reveal why many people are struggling. The average pension in Serbia is only about 17% of the average pension in the European Union. But the gap with Europe does not end there. A study by the Institute for Development and Innovation conducted for the Vienna Institute shows that in some areas Serbia could need decades or even a century to catch up with the EU. — improving living standards is also a key goal of the government's new development strategy. While many people in Serbia say it is becoming increasingly difficult to make ants meet on a salary or pension, government officials maintain that living standards have improved significantly in recent years, even if those gains have not been felt equally across society. Those changes may be evident in statistics, but they are harder to see at the market stalls. Lena has been selling food at this market for nearly 20 years. She says it has become more challenging to make a living. The average salary in Serbia is less than half the EU average and rising prices mean that money buys less than before. Economist Gorabovich says the

country's current growth model helps explain the ongoing disparity. Another concern is the rising oil prices driven by the conflict in the Middle East. Although the effects have not yet been fully felt in Serbia, the government says it is preparing measures to prevent a sharp increase in fuel prices. However, for Lilena and Slavitza, years of economic hardship have made such uncertainty part of everyday life. Yelena Militino across the Balkans, Serbia. On island, nestled in the stunning waters of the Adriatic Sea along the Croatian coast, residents seemed to lack one crucial aspect of life, proper medical care. However, help came from an unexpected source. A well-known doctor from Saro opened a practice just when it was needed the most. Azraich has the story. Life seems to slow down on this remote Creation Island. With beautiful architecture, warm weather and the blue waters of the Adriatic Sea, it feels like a postcard. Yet, there is one pressing issue. The residents have struggled for years with inadquent medical care. Relying on a small clinic staffed by a single doctor, many practitioners have come and gone, seemingly unable to adopt to the island's tranquil lifestyle. That is until general surgeon Luca Prinad arrived from SVO. He recently decided to settle on the island where he can not only contribute to the local community but also immerse himself in its breathtaking nature. speech. Foreign speech. Fore! Foreign! — Damian, a medical technician who has worked in the clinic for seven years, has seen many doctors come and go. This time he hopes that they have finally found a stayer. — locals believe that the positive spirit of SVO coupled with the Dr. Pinut's welcoming smile is precisely what the island has needed for a long time. Anti Sulttovich shared that the geographical distance combined with the stress of medical emergencies exuberates their plight. The nearest hospital is in Zad, a city approximately 25 km away across the Adriatic Sea. The journey takes around 55 minutes by ferry or passenger boat. In medical emergencies, a helicopter might also be used. — The island's population of 600 people is primarily local, but it also attracts a number of foreigners who choose to settle here for retirement. Harry and Yse Eat and Lure who relocated from Netherlands 5 years ago say they're happy with the island's life and having a doctor operating again is more than a blessing. — It's good that it's there. We will otherwise say I have to go to Z and that's not so easy. Certainly if something serious is happening you need a doctor in a way. There are a few people we connect with. That's nice. And yeah, nature is beautiful.

And he likes to help with the olives when they are ready to be picked. I'm not allowed. — With medical care once again within reach, residents feel more secure about their future. While challenges may still lie ahead, for many this small aatric treasure is still the place they choose to call home as the village across the Balkans. Thank you for watching TRT World and letting us once again take you across the Balkans. That is all from the team for this week. We hope to see you next time.