Login
Iran War Adds More Than €100bn to Europe’s Energy Import Bill
European Union countries have paid more than €100 billion extra for energy this year without receiving additional oil or gas, according to EU Energy Commissioner Dan Jørgensen, as disruption linked to the Iran war drives another energy shock through the European economy.
Speaking ahead of an informal meeting of EU energy ministers in Dublin, Jørgensen said Europe had “surpassed €100 billion” in additional spending.
“We have now surpassed €100 billion that we’ve paid extra for our energy this year without receiving one extra molecule of gas or oil,” he said in the European Commission’s recording of his remarks.
The figure puts a direct cost on the price shock which has followed disruption to oil and liquefied natural gas supplies associated with the conflict involving Iran.
The effective closure of the Strait of Hormuz has disrupted one of the world’s most important energy corridors. Under normal conditions, the waterway handles roughly one fifth of globally traded oil and significant LNG volumes.
Europe remains heavily exposed because most of the oil it consumes and about 80 per cent of its gas requirements come from outside the EU.
The consequences were already visible in trade figures published before the latest ministerial meeting.
Last week, EU Today reported that the EU’s oil import bill had risen 55.8 per cent in the second quarter compared with a year earlier, even though the physical volume of crude imported increased by only 1.2 per cent.
Europe was therefore paying substantially more without materially increasing the amount of energy it purchased.
The pressure has intensified as winter approaches.
EU gas storage is around 70 per cent full, roughly 12 percentage points below the level recorded at the same stage last year. Jørgensen has warned governments to continue filling storage or consider reducing demand if required.
Possible measures include limiting temperatures in public buildings, restricting outdoor heating and switching off unnecessary public lighting, according to recommendations circulated to governments ahead of the Dublin meeting.
The informal meeting of EU energy ministers focused on energy affordability, security of supply and Europe’s continuing exposure to international fossil-fuel markets.
Irish Energy Minister Darragh O’Brien described the situation as the second major fossil-fuel shock Europe had faced in four years and argued that domestic clean-energy production was essential if the EU wanted to reduce its vulnerability to future crises.
Europe is in a stronger physical position than during the 2022 energy crisis.
It has expanded LNG import infrastructure, increased renewable electricity generation and reduced gas demand. It has also sharply reduced its dependence on Russian pipeline gas.
But that restructuring has created different dependencies.
European buyers now compete more directly for LNG on global markets, meaning events in the Gulf, Asia or the United States can rapidly affect the price paid by European consumers.
EU Today reported earlier this month that reduced LNG availability and disruption around Hormuz had left European gas storage at historically weak seasonal levels.
Diesel presents another problem.
Europe became more dependent on imported refined products after reducing purchases from Russia, with the United States now supplying approximately half of EU diesel imports.
Washington has considered restrictions on diesel exports as domestic US prices rise. European officials have urged the Trump administration not to introduce such measures, warning that they would increase pressure on international markets.
Emergency reserves provide some protection.
EU countries are required to maintain strategic oil stocks, while the International Energy Agency coordinated a release of 400 million barrels from member-country reserves earlier this year.
France and Germany hold a particularly large share of Europe’s strategic diesel inventories. Further releases remain possible if international markets deteriorate, although no new coordinated decision has yet been taken.
The current crisis is also feeding into the EU’s longer-term energy debate.
Spain, Portugal and Luxembourg are now pressing for an EU renewable-energy target for 2040, arguing that increasing domestic electricity generation would reduce dependence on imported fossil fuels.
The security argument extends beyond climate policy. An EU Today Research Desk paper published in June examined how concentrated fossil-fuel supply routes and maritime chokepoints can transmit geopolitical shocks into European prices, infrastructure and industry.
The current disruption provides a practical example.
Europe has not bought substantially more fuel, but it is paying tens of billions of euros more because the international price of the energy it imports has risen.
The immediate concern is whether supplies and gas inventories will be sufficient through the coming winter without another sharp increase in prices.
The longer-term question is how much of Europe’s energy demand can be moved away from imported fossil fuels before another geopolitical crisis produces the same result.
For EU governments, Jørgensen’s €100 billion figure provides a measure of the cost of that dependency.
