EU official discusses energy markets while Donald Trump appears on screen.
The conflict involving Iran continues to send shockwaves through global energy markets, prompting concerns about sustained high prices. EU Energy Commissioner Dan Jorgensen has cautioned that oil and gas prices in Europe are unlikely to normalize soon, even if the conflict were to end immediately. He cited ongoing pressure on diesel and jet fuel supplies, coupled with increasing constraints in global gas markets, as key factors contributing to elevated electricity prices.
Since the conflict’s onset, Europe’s fossil fuel import bill has already surged by 14 billion euros, placing significant strain on businesses and households. In response, the EU is formulating a ‘toolbox’ of measures aimed at mitigating the impact on families and businesses. These proposals include decoupling gas prices from electricity prices, considering electricity tax cuts, and potentially implementing a ‘windfall tax’ on energy companies that have reaped substantial profits.
Jorgensen has also urged member states to support vulnerable sectors and adopt the International Energy Agency’s 10-point energy conservation plan. The EU remains steadfast in its commitment to eliminating its dependence on Russian gas, having already reduced imports from 45% to 10%. The bloc is actively pursuing alternative energy suppliers from countries such as Azerbaijan, Algeria, and Canada to safeguard against the weaponization of energy.
Meanwhile, oil prices have surged, and stock markets have declined following statements from former US President Donald Trump indicating that the US would continue to “hammer” Iran. Brent crude jumped to $106.29 a barrel, and West Texas Intermediate rose to $104.29. Major Asian stock markets also experienced declines. The World Bank has expressed “extreme concern” about the crisis’s potential repercussions on inflation, jobs, and food security. Britain is preparing to host a meeting to address the critical issue of reopening the Strait of Hormuz.
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