As the conflict involving Iran enters its second month, the European Commission is urging more than 400 million citizens to cut travel, work from home where possible and conserve energy to blunt a mounting supply shock. German Chancellor Friedrich Merz warned the economic damage 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 urged the public to follow International Energy Agency guidance: use public transport, increase car sharing and adopt fuel‑efficient driving to reduce demand for oil, particularly diesel and jet fuel. He stressed that every measure to save oil eases pressure on markets.
Analysts say consumer action alone 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 has not yet grasped the crisis’s scale and that shortages could appear within weeks as liquefied natural gas (LNG) cargoes are diverted toward higher bidders in Asia.
Markets have tightened sharply since US and Israeli strikes on Iran late in February and Tehran’s retaliatory missile and drone attacks on Gulf energy facilities. Efforts to disrupt traffic through the Strait of Hormuz have added further strain: roughly 20% of global oil and gas tanker traffic transits the Strait, so interruptions there cascade through global supply chains. Oil and gas prices spiked by as much as 70% at points following the strikes and counterstrikes.
The immediate financial impact for the EU is already significant. European Commission President Ursula von der Leyen said the conflict’s first 10 days added about €3 billion ($3.4 billion) to European fossil fuel import bills. A Bruegel think‑tank analysis found that a doubling of gas prices could tack roughly €100 billion onto Europe’s gas import bill over 12 months.
Although only a small share of the EU’s LNG — about 8% — previously came via Qatar and the Strait of Hormuz, the region’s reliance on finite supplies means even modest diversions or Asia outbidding Europe could produce shortages. The bloc has diversified away from Russian pipeline gas in recent years, boosting imports from the US and Norway; today the US is the EU’s largest gas supplier. Still, those supplies are limited, and Bruegel reported several LNG cargoes already rerouted from Europe to Asia. The planned phaseout of Russian LNG by 2027 will further tighten available volumes.
Policy responses within the EU are contested. Some politicians, including Belgian Prime Minister Bart De Wever, have argued for normalizing ties with Russia to regain access to cheaper energy. EU officials have rejected that option. Commissioner Jorgensen said the bloc will not reverse its sanctions stance or resume Russian imports.
Other measures under discussion include targeted industrial subsidies, temporary price caps and support for the most exposed sectors. Many economists caution against broad price caps, warning they can blunt the market signals that drive efficiency, demand reduction and investment in clean energy. Bruegel researchers say caps might offer short relief but could encourage higher consumption later and slow the shift away from fossil fuels.
Certain energy‑intensive industries face acute risks. Fertilizers Europe warned that disruptions could hamper fertilizer supply chains and urged EU help for farmers and producers to protect food security. Steel, cement, chemical, plastics, aluminium and glass manufacturers could see production costs soar and supply chains strain. Airlines are already signalling possible route reductions or other cutbacks as fuel costs climb and passenger demand softens.
Analysts are urging the EU to use the crisis to accelerate decarbonization and strengthen energy resilience. Jaller‑Makarewicz recommends immediate steps such as lowering heating in restaurants and government buildings, limiting official travel across member states and boosting investment in local green industries like heat pump manufacturing. Bruegel’s Alexander Roth has argued for coordinated measures such as cutting taxes on electricity instead of subsidizing gas — a move that could reduce consumer bills while incentivizing electrification through heat pumps, electric vehicles and other demand‑shifting technologies.
Bruegel and other experts called on policymakers to speed deployment of renewables and electrification technologies. Spain, which has recently invested heavily in wind and solar, has seen relative price stability — a contrast with Italy, which remains highly gas dependent and has experienced sharp price increases.
Damage to regional infrastructure may prolong the shock. Qatar’s Ras Laffan complex, a major LNG export hub, was struck by Iranian missiles on March 18; QatarEnergy warned repairs could take months or even years. That means LNG flows may remain constrained even if hostilities end quickly.
‘We don’t know how long the crisis will last,’ an EU official said, ‘but it is important to stress that it will not be short.’ Energy infrastructure in the region has already been hit repeatedly, and restoring normal flows may take considerable time. Policymakers now face the twin challenge of shielding households and key industries from immediate pain while using the disruption to accelerate the transition to more diverse, cleaner and more resilient energy systems.