Oil and gas prices in Europe are unlikely to return to normal levels any time soon, even if the war involving Iran ends, the European Union’s energy commissioner has warned.
Speaking after a meeting of EU energy ministers, Dan Jørgensen said the conflict has intensified pressure on global fuel markets, pushing energy prices sharply higher across Europe.
“What I find extremely important is to state as clearly as I can that even if that peace is here tomorrow, still we will not go back to normal in the foreseeable future,” he told reporters.
Fuel markets under pressure
According to the European Commission, Europe is not currently facing immediate shortages of oil or gas supplies. However, pressure on diesel and jet fuel availability and tightening global gas markets are continuing to push electricity prices higher.
Since the start of the conflict, energy costs have surged significantly. Gas prices in Europe have risen by roughly 70 percent, while oil prices have increased by about 60 percent.
The EU’s total bill for imported fossil fuels has increased by approximately €14 billion since the outbreak of the war.
EU preparing support measures
The European Commission is preparing a package of measures aimed at helping households and businesses cope with the rising energy costs.
Jørgensen said coordinated action among EU member states will be essential to avoid fragmented national responses that could send destabilising signals to global markets.
Among the options being considered are mechanisms that would make it easier to decouple electricity prices from gas prices, as well as possible reductions in electricity taxes, an idea previously raised by Commission President Ursula von der Leyen.
Possible windfall tax on energy companies
The commissioner said that although the EU does not expect a repeat of the severe natural gas crisis experienced in 2022, governments are still considering emergency options.
These include a potential one-off windfall tax on energy companies that benefit from unusually high profits during periods of market volatility.
At the same time, EU governments may be given broader flexibility to provide financial support to vulnerable households and industries under severe economic pressure.
Calls to reduce energy consumption
Jørgensen also encouraged EU countries to consider measures proposed by the International Energy Agency aimed at reducing energy demand.
These include promoting remote work, lowering motorway speed limits, expanding public transport use and encouraging car-sharing.
EU maintaining Russian gas ban
The European Union has reiterated its commitment to phasing out Russian energy imports in response to Vladimir Putin’s war in Ukraine.
Before the war, about 45 percent of the EU’s natural gas imports came from Russia. That figure has now fallen to around 10 percent and is expected to drop to zero as Europe expands imports from alternative suppliers.
The EU is exploring additional energy partnerships with countries including United States, Azerbaijan, Algeria and Canada, along with other smaller producers worldwide.
Jørgensen warned that Europe must avoid repeating what he described as past mistakes that allowed Russia to use energy supplies as a geopolitical tool.
“It would be totally unacceptable for us to continue buying energy that indirectly finances the terrible war that Putin is waging in Ukraine,” he said.