The European Union may be forced to scale back its flagship climate policies and geopolitical aims as the Iran war drives up energy prices - with lasting consequences for the bloc's energy
The European Union may be forced to scale back its flagship climate policies and geopolitical aims as the Iran war drives up energy prices - with lasting consequences for the bloc's energy strategy.
The energy crunch sparked by the conflict, now in its fourth week, has rattled Europe, which is heavily dependent on imported oil and gas. Around 8% of its liquefied natural gas (LNG) comes from the Middle East through the all-important Strait of Hormuz, which remains mostly blocked.
European benchmark gas prices TFMBMc1have jumped more than 60% since the conflict began, to above 50 euros per megawatt hour.
That is still far below the eye-watering peak of nearly 300 euros per MWh seen after Russia’s invasion of Ukraine in 2022, when pipeline gas supplies collapsed.
That earlier supply shock triggered a roughly 20% drop in consumption as governments imposed energy-saving measures and factories shut down in the face of uncompetitive power and gas costs.
While the EU has sharply expanded renewable energy deployment since then, with wind and solar generating more electricity than fossil fuels in Europe for the first time in 2025, gas still accounts for around a fifth of the bloc’s total energy consumption, reflecting the
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