Euronews explains: What the Strait of Hormuz crisis means for Europe

The military attacks carried out by the United States and Israel against Iran in a joint effort – followed by retaliatory attacks from Tehran on the facilities of the Gulf energy – caused a significant increase in the conflict, resulting in the complete closure of the Strait of Hormuz.

The waterway is one of the world’s most important energy destinations, transporting about a quarter to a third of global oil shipments and about a fifth of liquefied natural gas (LNG).

Its closure sent world markets into a panic. The EU estimates that gas prices have risen by 70% and oil by 50%, resulting in an additional €13 billion in fuel imports.

On March 30, the leaders of the G7 – Canada, France, Germany, Italy, Japan, the United Kingdom and the United States – said they were ready to take “any necessary measures” to protect energy stability and global supply.

European energy officials are meeting today to assess supply risks and consider emergency measures to reduce demand, according to a letter seen by Euronews.

What was the immediate effect of the Hormuz crisis?

The most immediate effect was a sharp rise in energy prices; driven by emergency supply shortages and uncertainty about how long disruptions will last.

Iran’s attacks on March 18 reportedly damaged between 30% and 40% of Gulf oil refining capacity, removing an estimated 11 million barrels per day from global supply.

This pushed Brent prices up to $119 a barrel, from $70 before the war. Analysts warn prices could rise sharply under worst-case scenarios, similar to the oil crisis of the 1970s.

Natural gas prices are also rising, with fears that they could return to levels seen during the 2022 energy crisis following Russia’s invasion of Ukraine.

How exposed is Europe to war in the Middle East?

The European Union’s direct dependence on Middle Eastern crude oil is still weak – about 8% of the country’s imports come from Saudi Arabia by 2024.

However, the bloc relies heavily on refined fuels such as diesel and jet fuel from countries including Saudi Arabia and Kuwait, making it vulnerable to disruptions in refining.

At the same time, LNG shipments originally destined for Europe are being diverted to Asia, where consumers are willing to pay higher prices.

How long would the interruptions last?

The damage to the Gulf’s energy resources is significant.

Analysts estimate that reopening the closed facilities could take several months, while fully rebuilding the damaged areas could take three years.

Even if the hostilities were to end quickly, European leaders warn that the economic and energy consequences may take a long time, depending on inflation and industrial costs.

What measures are being taken to reduce prices?

The International Energy Agency coordinated the release of 400 million barrels of oil on March 11 in an effort to stabilize markets, although this proved insufficient.

Saudi Arabia is trying to increase exports in other ways, including the Yanbu pipeline to the Red Sea, which is already operating near capacity.

Political efforts are also underway, with countries such as Pakistan and Turkey acting as intermediaries between Washington and Tehran – but little progress so far.

What are the risks?

Another major factor is Iran’s Kharg Island, which accounts for nearly 90% of the country’s exports.

Although recent US airstrikes have targeted this area, the electrical infrastructure there was spared. Iran has warned it could retaliate by targeting desalination plants in the Gulf – a move that could threaten water supplies for millions and deepen the crisis.

What emergency measures are in place for the EU?

The EU maintains emergency oil reserves equivalent to at least 90 days of use, and total European production is estimated at around 100 million tonnes.

Gas storage regulations usually require the storage to be filled to 90% in November, although these requirements have been reduced to 75% to avoid panic buying.

Why is this crisis particularly challenging for Europe?

The energy shake-up comes at a difficult time for the European economy.

Before the conflict, EU countries were already struggling with high energy costs and declining industrial competitiveness. Energy-intensive sectors such as steel, chemicals and cement have been seeking urgent support.

The current crisis poses the risk of rising prices and possible fuel shortages, exposing weaknesses in the bloc’s energy system.

How are individual EU countries responding?

Governments are taking a number of steps to reduce the impact.

Italy is seeking increased gas supplies from Algeria, while Belgium’s Fluxys is exploring other LNG sources, including the United States and Nigeria.

At the same time, EU countries are making tax cuts, subsidies and trade deals to protect consumers and businesses.

Others are making progress: Slovenia has introduced fuel rationing, while Austria has lowered fuel taxes and imposed limits on dealer profits.

EU finance officials are also considering broader measures, including oil price caps and wind taxes on energy companies.