The economic cost of the conflict between the United States, Israel, and Iran is becoming starkly visible in Europe, with the EU’s energy import bill rising by 6 billion euros since hostilities began. This staggering figure was highlighted as energy ministers met in Brussels on Monday to discuss emergency measures. The 27 nations are looking for ways to “curb the spike” in prices that has seen natural gas futures climb by over 50% in the last few weeks.
The primary reason for the shock is Europe’s heavy reliance on global markets for its oil and gas. While the bloc has successfully phased out most Russian energy, the closure of the Strait of Hormuz has cut off vital LNG supplies from the Middle East. This has created a “bottleneck” where European buyers must compete with Asian markets for a dwindling supply of fuel, driving prices through the roof.
To protect the economy, the European Commission is drafting a list of emergency interventions. These include examining state support for industries, cutting national fuel taxes, and temporarily lowering carbon prices. Commission President Ursula von der Leyen is expected to send a “shortlist” of these options to EU leaders ahead of a high-stakes meeting on Thursday.
Despite the collective talk in Brussels, many countries are already taking unilateral action. Croatia, Hungary, and France have all introduced various forms of price controls or caps at the pump. This “independent” movement has raised concerns about a fragmented European response, as wealthier nations like Germany have significantly more resources to shield their citizens than their neighbors.
The International Energy Agency’s decision to release 400 million barrels of oil is a significant step, but it may not be enough to lower gas prices for heating and manufacturing. As the Thursday summit approaches, the focus is on structural reasons for Europe’s high energy costs. The outcome will likely determine if the EU can find a sustainable way to live with high global energy prices or if it will face a prolonged period of economic stagnation.