The case

The energy crisis is continuing to intensify, contributing to rising inflation in Switzerland.

Source: economiesuisse – Rudolf Minsch

The commentary

Even though prices in Switzerland are soaring less than in many other countries, several factors help explain this relative stability: The strength of the Swiss franc, comparatively low energy consumption as well as delayed adjustments in electricity prices.

Yet, Switzerland will not remain unaffected. As seen with the war in Ukraine, geopolitical tensions have a direct impact on energy markets. Any escalation of existing conflicts or the emergence of new ones, such as tensions involving Iran, could drive prices even higher.

Crude oil will remain a key pillar of the global economy for the foreseeable future. The situation is straightforward: The longer critical supply routes like the Strait of Hormuz are disrupted, the more energy prices will rise. While Switzerland may experience these effects less severely than other countries, the increase in costs will still be clearly felt.