BRUSSELS

The rapidly escalating conflict involving Iran, the US and Israel is sending shockwaves through global energy markets, raising concerns in EU capitals about higher energy prices, economic instability, and the potential strengthening of Russia's war capabilities in Ukraine.

The crisis intensified after US and Israeli strikes in Iran triggered widespread retaliation by Tehran, including attacks across the Gulf region and a blockade of the Strait of Hormuz, one of the world's most important energy chokepoints.

The strait handles roughly one-fifth of global oil consumption and a significant share of the world's liquefied natural gas (LNG) trade. Disruptions there have already rattled markets, pushing oil prices above $100 per barrel and driving European gas prices sharply higher.

European officials say the continent is better prepared than during the 2022 energy crisis, having reduced reliance on Russian fossil fuels and diversified its energy imports. However, policymakers acknowledge that Europe remains vulnerable to global price shocks.

Yvan Verougstraete, a Belgian member of the European Parliament (MEP) and vice-chair of the Industry, Research and Energy Committee, said the crisis highlights the continuing geopolitical risks tied to fossil fuel dependence.

"In the short term, Europe is inevitably exposed," Verougstraete told Anadolu. "As long as we remain heavily dependent on imported fossil fuels, we will continue to be exposed to geopolitical shocks. Europe's next major challenge is energy autonomy."

Speaking to Anadolu, German MEP Michael Bloss warned that recent price increases show how vulnerable Europe remains to geopolitical disruptions tied to fossil fuel supply routes.

"The Commission saying the impact is 'limited' is a dangerous understatement. We're seeing price spikes that hit consumers and industry hard, and every week of instability around the Strait of Hormuz reminds us how exposed Europe still is to fossil fuel dependency," he said.

He noted that Europe has short-term buffers, including strategic reserves and diversified suppliers, but stressed that these measures only provide temporary relief.

"Europe cannot keep gambling its economic stability on geopolitical corridors it doesn't control," Bloss warned.

He said the latest tensions once again demonstrate the geopolitical risks tied to fossil fuel dependence and highlight the need to deepen the EU's long-term energy transition. "The lesson is always the same, and we keep refusing to learn it: as long as Europe runs on fossil fuels, our security is in someone else's hands," he said.

- Main energy security risk is 'price instability'

Kong Chyong, a senior research fellow at the Oxford Institute for Energy Studies, said Europe's main vulnerability today is "increasingly price instability rather than physical shortages."

During the 2021-2023 energy crisis, supply systems largely held up but required extremely high gas and electricity prices to balance the market. Those prices forced demand reductions in industry and required significant government subsidies to protect households and businesses.

"Even if supply volumes remain adequate, Europe can still experience significant economic stress through energy prices. In the longer term, resilience depends on reducing exposure to these compound shocks rather than focusing only on preventing physical shortages," Chyong explained.

Looking ahead, he said one of the key lessons is that energy security and price resilience should be treated as separate policy objectives.

"Europe may maintain physical supply and still face severe economic stress through wholesale energy prices," he said, noting that long-term policy should focus on reducing exposure to combinations of shocks.

To strengthen long-term resilience, he added, Europe should diversify energy procurement, expand system flexibility, improve storage and grid infrastructure, and gradually reduce structural dependence on fossil fuels during peak demand periods.

- 'Europe must reduce gas demand and imports'

Europe should brace for more volatility and higher energy prices as the Middle East crisis escalates, warned Ana Maria Jaller-Makarewicz, lead energy analyst for Europe at the Institute for Energy Economics and Financial Analysis.

"Mounting supply concerns have driven Brent crude oil futures to surge more than 15% to above $100 per barrel, and European natural gas futures climbed more than 20%," she told Anadolu.

She added that LNG buyers in both Europe and Asia are now facing higher prices as they compete for available cargoes.

"The longer the conflict takes to be resolved, the more implications for Europe's security of supply," she said.

Replacing LNG from Gulf suppliers could prove difficult, she said, as many alternative exporters are already operating near capacity.

Small additional volumes may come from countries including Nigeria, Angola, Equatorial Guinea, Mauritania, the Republic of Congo, Mexico, Brazil, Australia, and the US Virgin Islands, but the increases would likely be limited.

"Russia's war in Ukraine and the crisis in the Middle East have shown that depending on both pipeline gas and LNG imports threatens Europe's energy security. The only durable solution is structural: Europe must reduce gas demand and imports by scaling renewables and energy efficiency," she said.

- Returning to Russian energy would be 'strategic mistake'

Russian President Vladimir Putin said Moscow is open to resuming long-term energy cooperation with European buyers if it is free from political conditions, adding that they had "never refused" to work with European companies and would welcome renewed cooperation.

Energy relations between Russia and the EU largely collapsed after the war started in Ukraine, as the bloc pushed to reduce dependence on Russian energy through the REPowerEU plan.

Within the bloc, Hungary and Slovakia remain the main supporters of continuing imports of cheaper Russian energy.

Amid a recent rise in energy prices, and signals from Washington that some restrictions on Russian energy might be relaxed, questions are arising about whether Europe might reassess its current approach.

"Returning to Russian gas or oil would be a major strategic mistake," Verougstraete stressed, adding that Europe's reliance on Russian energy had already proven to be a significant geopolitical vulnerability.

"The response to one crisis cannot be to recreate the dependency that already put us at risk," he said. Instead, he argued that the EU must continue diversifying supply sources while accelerating domestic energy production.

Bloss also rejected the idea: "Going back to Russian energy would mean financing Putin's war machine and rewarding exactly the kind of geopolitical blackmail we set out to end."

Instead of reopening that channel, Bloss said the EU should activate coordinated measures to stabilize markets and reduce consumption, while also focusing on scaling up domestic clean energy production.

Verougstraete also warned that sustained price increases could indirectly benefit Russia. "Its economy still relies heavily on hydrocarbon exports. The higher global prices go, the higher the Kremlin's energy revenues become, and that can indirectly support Russia's war effort."