The European Commission President, Ursula von der Leyen, has warned that EU countries must direct their energy aid primarily towards vulnerable households and industries, or risk squandering billions of euros as the Iran war escalates and impacts oil and gas prices. Speaking on Wednesday, she emphasised the need for targeted support to avoid repeating the mistakes of the 2022 fuel crisis.
Impact of the Iran War on Energy Costs
The ongoing U.S.-Israel conflict, coupled with Iranian retaliation such as the disruption of the Strait of Hormuz, is costing the European Union nearly 500 million euros ($600 million) daily. This has led to rising fuel prices and concerns about a potential jet fuel shortage within weeks. Von der Leyen stressed that the bloc must learn from the 2022 crisis, when Russia used its energy leverage to undermine European support for Ukraine.
She noted that over 350 billion euros were spent on untargeted measures during that period, which heavily impacted member states' finances. "So let us not make the same mistake again, and let's focus our support where it matters most," she told EU lawmakers in Strasbourg, France.
Reducing External Energy Dependence
Von der Leyen argued that just as Europe broke its energy dependency on Russia, it must now reduce reliance on external supplies by increasing the use of renewable sources such as wind and solar, as well as nuclear power. "Our over dependency on imported fossil fuels makes us vulnerable," she said.
Since the war in Ukraine began in 2022, Russian gas imports into the 27 EU nations have dropped from 45% to 12% last year. Coal imports have been banned through sanctions, and oil imports have fallen from 27% in 2022 to 2%, with only Hungary and Slovakia continuing to purchase from Russia.
Long-Term Energy Strategy
The Commission President warned that the impact of the Iran war "may echo for months or even years to come." She advocated for a path to energy independence through "homegrown, affordable, clean energy supply from renewables to nuclear." She urged EU countries to increase the use of electricity generated from renewable and nuclear sources to power transport, heat homes, and reduce industrial dependence on fossil fuels. Currently, electricity accounts for less than a quarter of the bloc's energy consumption.
EU Energy Commissioner Dan Jørgensen had previously cautioned that the Iran war is not merely a short-term price spike but a crisis potentially as severe as the 1973 and 2022 crises combined. He noted that Europe has been forced onto the defensive with limited control over events. "Even in a best-case scenario, it's still bad," Jørgensen said. "Whether or not we will be in a security of supply crisis is primarily a result of what goes on in the Middle East. What we can do is to try and prevent, and limit the damage."
