Iran war leaves Europe facing another energy crisis

Katya AdlerEurope EditorThursday March 19, 2026

Turbulence in the Middle East has sent a fresh shudder through Europe’s energy system, stirring memories of past shocks that rattled the European Union.

Seven months after Russia launched its full-scale invasion of Ukraine in February 2022, the President of the European Commission rose in the European Parliament to charge Moscow with distorting the EU’s energy market.

“They prefer to flare the gas than to deliver it,” proclaimed Ursula von der Leyen, as spiralling energy prices hit consumers across the continent. “This market is not functioning anymore.”

“This is a war on our energy, a war on our economy, a war on our values and a war on our future,” she declared, arguing that Europe was already shifting off Russian gas and towards steadier partners including the US and Norway.

Fast forward four years, and energy angst is again coursing through the heart of Europe.

“We swore we’d learn. We promised things would change but here we are,” a highly frustrated European diplomat told me. He asked for anonymity so as to be able to speak openly.

His ire is now fixed on the price shock unleashed by the Middle East war — a crisis poised to overshadow Thursday’s summit of EU leaders in Brussels.

“Instead of concentrating on much-needed long-term plans – about how to make Europe more competitive in this increasingly volatile world, [European] prime ministers and presidents are now in a panic over [energy] prices, worried about angry voters and scrambling for short-term solutions.

“Just like the crisis after Russia’s fullscale invasion of Ukraine. Different conflict. Same European divisions; same dilemmas over energy. We can’t keep going round in these circles. Something’s got to give.”

Few in Europe’s policy class would dispute that final point.

But can a continent — and even the EU’s 27 countries with vastly different industries, energy mixes and views on renewables — truly secure its own power supplies?

Countries across Europe are feeling the strain.

Much has changed since 2022, when the EU moved to phase out Russian gas, oil and coal and to stand more independently after Moscow’s assault on Ukraine.

For a bloc often tagged as slow-moving, Brussels pivoted quickly once it chose to cut Russian energy ties. Today just 2% of EU oil imports come from Russia — destined only for Hungary and Slovakia — and the EU aims to halt all Russian gas purchases, LNG included, by next year.

It’s a dramatic shift from the pre-war era, when Russia supplied an estimated 55% of Germany’s natural gas imports, feeding energy-intensive sectors from chemicals to automotive.

When prices spiked in 2022 in the wake of the invasion and the Europe-Russia energy standoff, governments from Italy to the UK scrambled to cushion households and firms — a costly move coming on the heels of the Covid-19 economic shock.

“Diversification” quickly became the Brussels mantra: never again would the EU allow itself to lean so heavily on one supplier.

Yet four years on, dependence remains — only the names have changed. Europe now leans hard on Norway and the US. Simply removing Russia hasn’t solved the continent’s energy-security dilemma.

The US’s key role

Under President Donald Trump, the United States has become a central pillar in Europe’s energy provisioning, effectively replacing Russia.

In 2022, Europe raced from pipeline gas to liquefied natural gas (LNG). It is now the world’s largest LNG buyer, with the US as the biggest single supplier, providing 57% of EU LNG imports.

Germany, starved of energy, now sources up to 96% of its LNG from the US. That level of reliance may help explain why German Chancellor Friedrich Merz stayed silent beside Trump at the White House two weeks ago as the US president threatened a trade embargo on Spain for refusing to allow its bases to be used to launch strikes on Iran.

With Germany’s sputtering economy and its thirst for US energy, Merz may have wished to avoid provoking a famously vengeful president. It hardly projected European unity.

Since returning to the Oval Office just over a year ago, Trump has leveraged both economics and Europe’s desire for US help to forge a sustainable peace in Ukraine to push the EU into buying pricier American LNG.

In July, he threatened blanket 30% tariffs on EU exports to the US, excluding commodities such as steel that already faced even higher duties.

Ursula von der Leyen duly flew to Trump’s Turnberry golf resort in Scotland, where he was on holiday, and committed to spend $750bn (£568bn) over three years on US oil, LNG and nuclear technologies.

The EU pledged zero tariffs on US imports. In return, Trump “reduced” the tariff threat to 15% on most EU goods entering the US.

Von der Leyen framed the pact as part of a long-term effort to cut reliance on Russian fossil fuels. But it also left the bloc in a lopsided position vis-à-vis Washington.

The Trump administration hailed the largest trade deal in history, touting a smaller US trade deficit with the EU and locking in massive European investment in US energy, defence equipment and more.

European vulnerability

Whether EU demand and US supply can actually meet the scale implied by the deal remains uncertain; MEPs are still debating it.

Europe’s LNG tilt also magnifies exposure to global price swings during crises — as the Gulf turmoil now shows.

The Strait of Hormuz, the world’s most vital oil chokepoint, handles about 20% of global supply. Since Israel and the US attacked Tehran on 28 February, Iran has effectively blocked the passage, save for a handful of tankers carrying Iranian oil to India and China.

Europe buys little oil or LNG directly from the Middle East, but these are global markets: any disruption in Hormuz — now or later — can send prices rocketing in Europe regardless of limited physical imports.

Fears over supply scarcity and the duration of the crisis pushed oil up about 8% and European gas roughly 20% on the morning of 2 March.

Cost and competitiveness

“This choice between Russian energy and global market volatility is a very bad choice for Europe,” Dan Marks, a specialist in energy security at the defence think tank, the Royal United Services Institute (Rusi), told me.

He argues Europe will still secure supplies despite Hormuz’s effective closure because the wealthy continent can outbid others in a pinch — but warns the cost will bite into competitiveness.

In the long run, he says, Europe should build stronger stockpiles and reduce or reorganise demand so it has more control when supply suddenly shifts, as it has now.

Marks also cautions that relying on external players such as the US introduces “wildcards” that often go overlooked.

What if Trump suddenly decided to keep energy supplies for US domestic consumption only, in an attempt to reduce petrol prices in the US or as a way to punish European countries for not immediately sending warships to the Strait of Hormuz to keep the waterway open, as he demanded this week.

Marks also raises the possibility of the US suffering terrible storms or fires in the future, destroying LNG terminals.

“It’s a layering of risk. There are no easy answers here,” Marks concludes.

Even boosting purchases from democratic ally Norway entails complications.

Norway is now the EU’s largest gas supplier, having stepped into Russia’s shoes. It provides a third of the bloc’s annual gas consumption — and half of the UK’s.

But Oslo says it is already pumping near its limit. Any increase would require fresh exploration and investment — a headache for EU policymakers.

Norway argues the EU undercuts itself by seeking to end oil and gas development in the European Arctic to fight climate change, while Russia pursues major LNG expansion in its own Arctic.

Oslo is lobbying Brussels hard to rethink. It’s one example of how environmental policy is being sucked deep into Europe’s energy debate.

Hunt for short-term solutions

Thursday’s summit will be dominated by emergency fixes. Leaders fret that surging energy bills and potential inflation — coupled with possible refugee flows linked to the Middle East conflict — could anger voters and boost populists on both flanks.

“It is crucial that we reduce the cost impact [from the Iran war],” Ursula von der Leyen said this week in the run-up to the summit. “We must deliver relief now… [We need] a comprehensive look at how to reduce people’s energy bills.”

Among options under discussion: revisiting taxes, capping retail prices and other stopgaps to prop up hard-hit industries.

Across the Channel, the UK government is also under pressure to shield households. Last week, Chancellor Rachel Reeves said the Treasury is dusting off contingency work from the 2022 Russia-Ukraine energy shock.

The Chinese lesson

EU capitals have asked the Commission to speed up electrification across the bloc — without blowing up costs.

They know China has a head start. Although the world’s biggest oil importer is affected by Hormuz’s de facto closure, Beijing has long pursued an energy-security playbook built for this kind of moment.

At its centre is electrification: shifting more of the economy away from direct oil and gas use to cut exposure to geopolitically shaky fuel markets.

More than 30% of China’s final energy consumption now comes from electricity, versus just over 20% globally and less than a quarter in the EU.

Policies driven as much by security as by climate goals mean more than half of all cars sold in China are electric rather than combustion-engine.

Europe, by contrast, is mired in division. The Iran war is being invoked by both backers and critics of green policies and alternative supplies.

Belgium’s Prime Minister, Bart De Wever, stunned many at the weekend — including members of his own coalition — by urging the EU to normalise relations with Russia to regain access to cheap energy.

“It is common sense,” he asserted. “In private European leaders tell me I am right, but no one dares say it out loud.”

Some in German industry mutter the same off the record. The hard-right AfD, currently leading opinion polls, wants Russia sanctions lifted at once.

Elsewhere, the Middle East-driven price surge is being wielded as fresh ammunition against the EU’s two-decade-old Emissions Trading System (ETS).

The ETS makes industry pay a carbon price for pollution, designed to wean companies off fossil fuels over time.

A fierce clash looms at Thursday’s summit between countries that want to keep the ETS intact and those seeking to dilute or scrap it.

Spain, Sweden and Denmark argue that weakening the ETS would punish firms that modernised and cleaned up while rewarding laggards still wedded to fossil fuels.

Opponents include several Central European states fundamentally against the ETS, while Austria and Italy want to ease its impact on electricity prices.

Italian Prime Minister, Giorgia Meloni, said last week: “With the outbreak of the crisis in the Middle East, the issue of energy prices has clearly become even more important, which is why, at European level, we are also calling for the urgent suspension of the application of the ETS to electricity production.”

One Commission idea — while acknowledging the ETS needs a revamp — is to channel ETS revenues to help industries in member states struggling with rising costs.

“We are in a complex world of trade-offs,” says Georg Zachmann, a specialist in EU energy and climate policies from the Brussels-based Bruegel think tank.

“If Europe wants to get invested in nuclear or renewable energies with the aim of being more self-reliant and energy secure, that will take time.”

He calls it “madness” that sun-drenched southern Italy hasn’t deployed far more solar panels.

“You need a long-term plan but also a realistic one. The EU has one, but new targets for 2030 and particularly 2040 are very ambitious.”

The EU has set a legally binding target to reduce net greenhouse gas emissions by 90% by 2040, compared to 1990 levels. “Are they actually credible?” he asks.

Zachmann says EU governments also fear the price tag. “Europe broadly wants to push oil and gas out of the [energy] mix but policy makers are sensitive to cost implications.” And voter reactions.

Politics, he adds, also hamper deeper EU-UK cooperation on energy.

“On a sectoral level, both EU and UK energy people want to work more together because it makes a lot of sense. From a purely economic perspective everyone would benefit.”

But the shadow of Brexit lingers, he says. The EU ultimately defers to the European Court of Justice to police the single market. “And the UK doesn’t accept that.”

Rusi’s Dan Marks argues the EU should be more flexible — and the UK more ambitious — on joint energy efforts.

“The reality that Europe faces will keep bringing the two parties back together,” he says. “The UK has the biggest offshore wind fleet and biggest plans for the North Sea, whereas the British government will want to ensure that in a crisis, France wouldn’t cut off energy supplies to the UK,” he adds. There’s a mutual interest in assured energy security.

So, will the Iran war finally force a step change in Europe’s pursuit of energy security?

“Every time there’s an oil and gas crisis, everyone thinks it’s a turning point,” says Marks.

“Think back to the 1970s and 80s and US congress looking at reducing dependency and energy consumption. Now it’s 2026 and lo and behold, there’s another gas crisis and we’re just as exposed as ever we were.”

No one doubts the stakes. Europe’s leaders in Brussels know it. What’s unclear is whether they can muster the unity — and the nerve — to act.