Finance ministers of the European Union are contemplating a limit on oil prices or imposing taxes on unexpected profits as they evaluate a unified reaction to climbing energy expenses, fueled by the escalating natural gas and oil prices resulting from the conflict in Iran.
EU officials emphasize that the bloc is more equipped than in 2022, when Russia's invasion of Ukraine caused significant energy deficiencies. They highlight the boost in local clean energy generation and enhanced infrastructure.
Nonetheless, uncertainty continues to be significant because of the unknown length of the conflict. Officials caution that the EU's "financial flexibility is more restricted than prior," due to rising defence expenditures.
Officials stated that although efforts to diversify supplies have been made since 2022, Europe is still vulnerable to global shocks and must prepare for renewed volatility, even if it does not escalate into a full-blown crisis.
After a ministerial meeting in Brussels on Friday, Economy Commissioner Valdis Dombrovskis stated that the “scale, severity, and impact” of the war have escalated in the last two weeks.
He referenced the closing of the Strait of Hormuz and assaults on energy facilities, which have raised Brent crude to over $100 a barrel and increased natural gas costs.
The crucial factor is the length and severity of the crisis, as these will dictate the magnitude of the energy shock. "Eurogroup President Kyriakos Mihrakakis stated, 'We collectively aim for de-escalation and to prevent significant disruption to energy infrastructure.'"
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Pierre Gramegna, executive director of the European Stability Mechanism, cautioned that “even if the conflict ended tomorrow, the effects would linger for an extended period.”
Ministers considered potential joint actions grounded in a European Commission memo from 26 March, reviewed by Euronews, alongside International Energy Agency leader Fatih Birol, who cautioned about an energy crisis even more intense than that of the 1970s.
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While evaluating the lasting effects of the Iran conflict, the Commission is calling on member states to hasten the transition to clean energy. Spain and Portugal are mentioned as cases because of their reduced exposure to price fluctuations associated with renewables.
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The note states that in 2025, renewables made up approximately 48 percent of the EU’s electricity mix, an increase from 36 percent in 2021, primarily due to wind and solar energy. During that same timeframe, fossil fuels decreased from 34 percent to 26 percent.