Europe's Energy Supply Vulnerability Exposed by US-Iran Conflict

The ongoing conflict between the United States and Iran has led to higher fuel prices in Europe, with no sign of resolution. Peter Verbaken, Head of Liquid Commodities at APG, notes that four years after Russia's invasion of Ukraine, Europe's energy supply is facing another setback.

Verbaken explains that Europe was heavily dependent on cheap Russian gas before the conflict, which 'more or less disappeared overnight'. This led to a diversification of suppliers, with most coming from the global LNG market. However, even though Europe doesn't import large amounts of LNG from the Middle East, it's still facing higher prices due to Asian and European buyers competing for alternative shipments.

The current situation has exposed Europe's vulnerability in terms of energy supply. Verbaken suggests that thinking at a 'higher level' is necessary, which could mean alternative energy sources or other forms of flexibility, making sure there are options when things go wrong.