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Military strikes by the United States and Israel against Iran in a joint effort \u2014 followed by retaliatory attacks from Tehran on Gulf energy infrastructure \u2014 have triggered a major escalation in tensions, culminating in the almost total closure of the Strait of Hormuz.<\/p>\n
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The waterway is one of the world\u2019s most critical energy chokepoints, handling roughly a quarter to a third of global oil shipments and around a fifth of liquefied natural gas (LNG). <\/p>\n
Its closure has sent shockwaves through global markets. The EU estimates gas prices<\/a> have risen 70% and oil by 50% resulting in an extra \u20ac13 billion bill on fossil fuel imports.<\/p>\n On 30 March, leaders of the G7<\/a> \u2014 Canada, France, Germany, Italy, Japan, the United Kingdom and the United States \u2014 said they stand ready to take \u201cany necessary measures\u201d to safeguard energy stability and global supply.<\/p>\n European energy ministers are meeting today to assess supply risks and consider emergency measures to curb demand, according to a letter seen<\/a> by Euronews.<\/p>\n What has been the immediate impact of the Hormuz crisis?<\/p>\n The most immediate effect has been a sharp rise in energy prices; driven by a sudden supply shortfall and uncertainty over how long disruptions will last.<\/p>\n Iran\u2019s strikes on 18 March reportedly damaged between 30% and 40% of Gulf oil refining capacity, removing an estimated 11 million barrels per day from global supply.<\/p>\n This has pushed Brent crude prices to around $119 per barrel, up from roughly $70 before the conflict started. Analysts warn prices could rise significantly further under worst-case scenarios, drawing parallels to the 1970s oil crisis.<\/p>\n Natural gas prices are also climbing, with fears they could return to levels seen during the 2022 energy crisis following Russia\u2019s invasion of Ukraine.<\/p>\n How exposed is Europe to the war in the Middle East?<\/p>\n The European Union\u2019s direct reliance on Middle Eastern crude oil remains relatively limited \u2014 about 8% of imports came from Saudi Arabia in 2024.<\/p>\n However, the bloc is more dependent on refined fuels such as diesel and jet fuel from countries including Saudi Arabia and Kuwait, leaving it vulnerable to refinery disruptions.<\/p>\n At the same time, LNG shipments originally bound for Europe are being diverted to Asia<\/a>, where buyers are willing to pay higher prices.<\/p>\n How long could disruptions last?<\/p>\n The damage to Gulf energy infrastructure is significant.<\/p>\n Analysts estimate that restarting shut-down facilities could take several months, while fully rebuilding damaged sites may take up to three years.<\/p>\n Even if hostilities were to end quickly, European leaders warn that the economic and energy impacts could linger for some time, feeding into inflation and industrial costs.<\/p>\n What measures are being taken to ease prices?<\/p>\n The International Energy Agency coordinated the release of 400 million barrels of oil<\/a> on 11 March in an effort to stabilise markets, though this has so far proved insufficient.<\/p>\n Saudi Arabia is attempting to boost exports via alternative routes, including the Yanbu pipeline to the Red Sea, which is now operating near capacity.<\/p>\n Diplomatic efforts are also ongoing, with countries such as Pakistan and Turkey acting as intermediaries between Washington and Tehran \u2014 but with limited progress so far.<\/p>\n What are the risks?<\/p>\n One major flashpoint is Iran\u2019s Kharg Island<\/a>, which accounts for around 90% of the country\u2019s crude exports.<\/p>\n Although recent US strikes targeted the site, the energy infrastructure there was spared. Iran has since warned it could retaliate by targeting desalination plants in the Gulf \u2014 a move that could threaten water supplies for millions and deepen the crisis.<\/p>\n What contingency measures are set for the EU?<\/p>\n The EU maintains emergency oil reserves equivalent to at least 90 days of consumption, with total European stockpiles estimated at around 100 million tonnes.<\/p>\n