Europe is preparing for an energy supply and price crisis against Iran. The closure of the Strait of Hormuz, through which 20% of oil and gas for world trade transit, and the energy companies of the Gulf countries, which supply liquefied natural gas to the Old Continent, are causing the markets to falter. And it is already noticeable in the pockets of European consumers. The Community Executive, fearful that the war will drag on, is analyzing activating extraordinary measures like those launched four years ago by , which forced Europe to wean itself off of cheap Russian gas.
Faced with a situation of great uncertainty and new cracks in Europe’s energy security, still dependent on fossil fuels, the EU once again points to the green and renewable agenda, which it had put aside due to pressure from the right, which claims that it hinders competitiveness. And some, with the excuse of supply problems, are reviving the debate about buying hydrocarbons from the Kremlin again. Meanwhile, Brussels is preparing a battery of measures and, such as initiatives to control air conditioning temperatures, encourage teleworking or even impose fuel rationing and flight restrictions; and even in the medium and long term, such as a price cap, as was done with gas in 2022, or reactivating joint purchases, community sources point out.
In Italy, Air BP Italia (a subsidiary of the British oil company BP) has warned four airports – those in Bologna, Treviso, Venice and Milan-Linate – that they could face restrictions on the supply of jet fuel due to shortages by a key operator. The company has informed the airlines that fly to those airfields that it will give priority to medicalized and state flights, and flights of more than three hours, according to the Ansa agency.
In addition, other countries have already introduced emergency measures, such as Slovenia, which has limited fuel purchases due to a shortage of fuel at gas stations, according to the Government. The authorities have imposed a limit of 50 liters per day for private vehicles and 200 for companies and farmers, as announced ten days ago by the Slovenian Prime Minister, Robert Golob. The Government assures that the measure seeks to prevent fuel hoarding and cross-border refueling.
The European Commission, at the moment, there is no risk to the supply, as occurred when Europe tried to get rid of Russian gas. But the markets are suffering (and may worsen) the impact of the increase in the price of a barrel of brentwhich has caused increases of around 70% for gas and 60% for oil in Europe. Since the start of the war, on February 28, the EU’s bill for importing fossil fuels has increased by 14 billion euros, according to estimates by the Community Executive.
Brussels is already finalizing a battery of measures to deal with the possible crisis, as commissioned by the leaders of the Member States at the last European Council, in mid-March. It will be a set of initiatives based on the extraordinary measures implemented by the large-scale Russian invasion of Ukraine, which was a great energy shock for Europe, European sources point out.
cheap russian gas
The interruption in 2022 of Russian gas, which the Kremlin used as a pressure lever, led the EU to diversify its sources of supply and look at new markets. Brussels issued other regulations, such as the one that required a minimum gas storage of 80% of the capacity of each Member State or the one that limited the temperature of heating and air conditioning in public buildings. And he prepared the ground to dictate energy rationing that gave priority to certain vulnerable industries and sectors, which could be applied now.
In this context, however, the situation is different, because the EU has more suppliers, but energy insecurity remains a vulnerability. “Our fossil dependence on the Gulf countries is less than what we had on Russia, but there are tools that were thought of then and that can be used now, such as temperature restrictions, which are likely to be applied,” says socialist MEP Nicolás González Casares.
On Tuesday, energy ministers from the 27 EU member states will discuss the matter. Previously, European Commissioner Dan Jorgensen proposed a series of short-term initiatives to promote fuel savings and curb consumption. The European official relies on the recommendations of the International Energy Agency: reduce speed limits by at least 10 kilometers per hour, encourage public transport, promote teleworking or promote high-speed trains and night railways instead of flights.
The uncertainty about the war between the American Donald Trump and the Israeli Benjamin Netanyahu, however, is enormous. “Even if peace comes tomorrow, we will not return to normal in the foreseeable future,” Jorgensen warned.
Green agenda
In Brussels and extraordinary measures. As in the crisis generated by Russia’s war against Ukraine. That, González Casares points out, left great lessons that can be applied now. “It is clear that we are not going to find fossil energy, and those who sell us fossils are not behaving like good friends,” says the MEP, who points out that the countries most dependent on gas are more affected by the increase in electricity prices.
A study published last week by the Bruegel Institute, one of the leading economic think tanks in Brussels, recalls that countries that use less gas and generate their electricity mainly from renewable energy, nuclear energy or other generation and storage options, are less affected by the relationship between the increase in gas and electricity prices. And he gives the example of Spain, where there has been rapid growth in wind and solar energy.
But the blow from the Iran war and the closure of the Strait of Hormuz not only affects energy and energy markets globally. There is already serious concern about its impact on fertilizer supplies, something that could impact harvests and lead to a global food crisis. The supply of medicines may also be affected, according to experts.
