The closure of the Strait of Hormuz has led to unprecedented disruptions in global oil and gas supplies, raising fears of a prolonged energy crisis in Europe. The Strait previously facilitated at least a fifth of the world’s oil and seaborne gas. This situation has intensified amid ongoing geopolitical tensions.
The past decade has seen a rapid succession of global energy crises driven by military conflict, extreme weather, and supply-chain issues. The Iran war has caused the greatest disruption to oil and gas supplies in history. Diesel and petrol prices in Europe have soared by an average of 26% and 12% respectively since the start of the conflict.
Key statistics:
- The main European natural gas price benchmark, TTF, doubled from €30 to €60 per megawatt hour in the first weeks of the Iran war.
- European governments have committed more than €11 billion in fiscal measures to cushion households and businesses during this energy crisis.
- The EU has adopted the Middle East crisis Temporary State aid Framework (METSAF), targeting the fishery, transport, and agriculture sectors.
Officials from various sectors express concern over future developments. Ursula von der Leyen emphasized the need to accelerate the shift to homegrown, clean energies for better energy independence and security. Wopke Hoekstra warned that current economic data is not encouraging.
Yet, observers note that the energy transition is introducing new vulnerabilities. This includes increased dependence on imports of low-carbon technologies concentrated in China. The current crisis may accelerate discussions around diversifying energy sources to enhance energy security.
Dan Jørgensen stated simply: “Hope is not a strategy.” The urgency for action is palpable among European leaders as they navigate these turbulent times.
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