European Union leaders are holding emergency talks on how to contain a rapidly escalating energy crisis triggered by the US-Israeli war on Iran, as oil prices surge to their highest levels in almost four years and gas costs spiral across the continent.
Brent crude surged to $119.50 per barrel early this week before retreating to around $107.80 after reports that the release of strategic oil reserves was under consideration. In the first ten days of the conflict alone, gas prices in the EU rose by 50 per cent and oil prices by 27 per cent, according to European Commission President Ursula von der Leyen — causing additional costs for fossil fuel imports worth €3 billion ($3.5 billion).
G7 finance ministers signalled readiness to take “necessary measures” in response to the price surge but stopped short of committing to coordinated emergency releases of strategic oil reserves. French Finance Minister Roland Lescure, whose country holds the G7 presidency this year, said Europe and the United States currently do not face immediate supply shortages.
EU ministers gathered in Brussels to explore a range of measures to curb energy prices and inflation, with the release of emergency oil stocks among the options being debated. Germany said it supports keeping that option on the table but emphasised that the moment has not yet arrived to deploy it.
The debate over far-reaching bloc-wide reforms has returned in full force, with member states divided over how to reduce price volatility. Von der Leyen floated the idea of a gas price cap, while Italy called for a suspension of the EU’s carbon pricing mechanism — a proposal that has drawn strong opposition from climate policy advocates.
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The Strait of Hormuz, a critical Gulf waterway through which approximately one-fifth of the world’s oil supplies pass, has effectively been shut down as a result of the war, while a substantial amount of oil production has been curtailed in countries targeted by retaliatory Iranian strikes.
The crisis has also reignited a dangerous debate about Europe’s energy independence. Moscow-friendly EU member states including Hungary have called for a lifting of EU sanctions on Russian energy imports to ease the supply crunch, a suggestion von der Leyen flatly rejected. “In the current crisis, some argue that we should abandon our long-term strategy and even go back to Russian fossil fuels. This would be a strategic blunder,” she told the European Parliament.
The crisis has highlighted stark differences in how exposed individual member states are to soaring gas prices. In Spain, gas influenced the price of electricity in only 15 per cent of hours in 2026 so far, compared to 89 per cent in Italy — a consequence of Spain’s more advanced structural decoupling of electricity prices from gas costs.
Energy policy analysts have urged EU leaders to resist the temptation of short-term emergency fixes, arguing that the only durable response to recurring crises driven by geopolitical shocks is to accelerate the bloc’s decarbonisation agenda and reduce its structural dependence on fossil fuel imports. “This is not the first energy crisis Europe has faced in recent years, and in today’s geopolitical environment, it is unlikely to be the last,” one analyst warned.
The European Commission and EU member states convened separate emergency meetings of the Gas Coordination Group and Oil Coordination Group, confirming no immediate supply shortfall — though the longer the conflict persists, the greater the risk of physical shortages compounding the already significant price shock.