The European Union (EU) is scrambling to prepare measures for what officials now warn could be a prolonged energy crisis, as conflict in the Middle East and disruptions to global supply routes continue to inflate oil and gas prices.

The European Commission has urged member states to act swiftly and in co-ordination to safeguard fuel supplies, amid fears that the instability will trigger sustained disruptions to international energy trade.

While EU officials insist there are no immediate shortages, the warning signs are mounting. Energy prices have surged dramatically since the conflict began, with gas prices rising by around 70% and oil by 60%. In just one month, the bloc’s fossil fuel import bill has jumped by €14bn.

ADVERTISEMENT

Energy commissioner Dan Jørgensen said the situation demands urgent and unified action: “The European Union’s security of supply remains guaranteed. But we must be ready for a potentially prolonged disruption”.

Markets

Diesel and jet fuel markets in particular continue to tighten, crude oil remains high historically, while rising gas prices will soon begin to feed through into higher electricity prices across Europe. Officials warn these pressures could deepen in the coming months.

Jørgensen cautioned that even a rapid end to the conflict would not bring an immediate return to normal.

“Even if peace came tomorrow, we would not go back to normal in the foreseeable future,” he said after a meeting of EU energy ministers.

The Commission is now working on an emergency “toolbox” of measures aimed at shielding consumers and businesses from rising costs.

Reports suggest that at least five EU countries are reportedly pushing for a windfall tax on energy companies benefiting from the surge in oil and gas prices. Ireland introduced a similar temporary windfall tax on electricity generators in 2022 and 2023.