The European Commission is urging over 400 million citizens to cut travel, work from home and conserve energy as the war involving Iran enters its second month. German Chancellor Friedrich Merz warned the economic hit could be “as heavy as we recently experienced during the COVID pandemic or at the start of the Ukraine war,” when Europe sharply reduced purchases of Russian energy.
After an emergency meeting of EU energy ministers in Brussels, EU Energy Commissioner Dan Jorgensen called on Europeans to follow International Energy Agency guidance: use more public transport, increase car sharing and adopt efficient driving to save oil, especially diesel and jet fuel. “The more you can do to save oil, especially diesel, especially jet fuel, the better we are off,” he said.
Analysts say such measures will not be enough. Ana Maria Jaller‑Makarewicz, lead energy analyst for Europe at the Institute for Energy Economics and Financial Analysis, warned the EU “hasn’t yet realized the magnitude of the crisis” and that shortages could be felt within weeks as liquefied natural gas (LNG) cargoes are diverted to higher bidders in Asia.
Oil and gas prices jumped as much as 70% after US and Israeli strikes on Iran in late February, and Tehran’s retaliatory missile and drone strikes on Gulf energy facilities, plus efforts to block the Strait of Hormuz, have tightened global markets. About 20% of global oil and gas tanker traffic transits the Strait, and disruptions there ripple through supply chains.
The immediate financial impact on the EU has already been significant. European Commission President Ursula von der Leyen said the first 10 days of the conflict added roughly €3 billion ($3.4 billion) to European fossil fuel import bills. A Bruegel think‑tank analysis estimated that a doubling of gas prices could tack about €100 billion onto European gas import costs over 12 months.
While the EU had been less dependent on energy through the Strait of Hormuz — only about 8% of its LNG previously came from Qatar — continued conflict raises the risk that even small supply shifts or Asia outbidding Europe could create shortages. The bloc has diversified away from Russian pipeline gas in recent years, importing more from the US and Norway; the US is now the EU’s largest gas supplier. But those supplies are finite, and Bruegel reported several LNG cargoes already diverted from Europe to Asia. The planned phaseout of Russian LNG by 2027 will further constrain supplies.
Policy responses inside the EU are contested. Some politicians, such as Belgian Prime Minister Bart De Wever, have argued for normalizing relations with Russia to regain access to cheaper energy. EU officials have rejected that option: Jorgensen said the bloc will “not import one molecule” of Russian energy.
Other options under discussion include industrial subsidies, temporary price caps and targeted support to exposed sectors. Bruegel and other analysts caution against broad price caps, arguing they blunt the price signals that encourage efficiency, demand reduction and clean-energy investment. Alexander Roth, a Bruegel co‑author, said caps could offer short relief but would likely increase gas consumption later and slow the transition away from fossil fuels.
Certain energy‑intensive sectors face acute risks. Fertilizers Europe warned the war could disrupt fertilizer supply chains and urged EU support for farmers and the fertilizer industry to protect food security. Steel, cement and chemical manufacturers, along with plastics, aluminium and glass producers, could see costs spike and supply chains strained. Aviation carriers have already signalled potential cutbacks as fuel costs rise and demand softens.
Analysts urge the EU to use the crisis to accelerate decarbonization and resilience. Jaller‑Makarewicz recommends immediate, concrete steps: reduce heating in restaurants and government buildings, limit official travel across the bloc and increase investment in local green industries like heat pumps. Roth suggested coordinated EU measures such as cutting taxes on electricity rather than subsidizing gas, to lower consumer bills while encouraging electrification investments — for heat pumps, electric vehicles and other demand‑shifting technologies.
Bruegel also called on policymakers to “seize the opportunity to deploy renewable energies and electrification technologies even faster.” Spain, with heavy recent investment in wind and solar, has managed to stabilize energy prices, a contrast with Italy — among Europe’s most gas‑dependent economies and a major importer of Qatari gas via the Strait — which has seen sharp price rises.
Infrastructure damage in the region will prolong the shock. Qatar’s Ras Laffan complex, a major LNG export hub, was hit by Iranian missiles on March 18; QatarEnergy has said repairs could take months or years. That means even if hostilities end quickly, LNG flows may not return to previous levels for an extended period.
“We don’t know how long the crisis will be, but it’s very important to underline that it will not be short,” Jorgensen said, noting that energy infrastructure in the region “has been and continuously is being ruined by the war.” Edited by: Martin Kuebler
