Europe Braces for Second Energy Price Shock Amid Ongoing Conflicts
Europe is facing its second energy price shock in as many years due to ongoing conflicts in Iran and Ukraine. The crisis has led to a spike in oil and gas prices, impacting households and businesses across the globe.
The Strait of Hormuz, through which 20% of global oil and gas exports pass, remains restricted, exacerbating the shortage. Energy Commissioner Dan Jørgensen warned that 50 million Europeans may have to choose between heating or food this winter due to unaffordable energy costs.
Residential electricity prices in the EU are 34% higher on average than in 2019, while wholesale gas prices could rise by 25% year-on-year in the second half of 2026. The crisis has also led to a global diesel shortage, affecting key sectors such as agriculture and shipping.
US President Donald Trump's proposal to ban US diesel exports for 90 days has been met with skepticism, as it could disrupt supply chains and lead to higher prices in the EU. European Commission spokesperson Anna-Kaisa Itkonen rejected the idea, stating that a ban would 'undermine our trust'.