How oil and energy prices are rising in Europe due to the war in Iran

The war in Iran has caused a significant increase in Brent crude oil prices and a domino effect on fuel and energy prices in Europe. In some countries, such as Spain, fuel prices have risen by over 34%, while electricity and gas bills have directly impacted household budgets. This effect emerged after the conflict disrupted around 20% of global oil supplies passing through the Strait of Hormuz, pushing Brent prices from 60 to over 100 euros per barrel within just a few days.

European governments have begun taking various measures to ease the impact on citizens. In Spain, the Council of Ministers approved a €5 billion package including tax cuts on fuel, electricity, natural gas, and butane, promising reductions of up to 30 cents per liter for fuel and up to 13% for electricity bills. Transport operators, farmers, and fishermen will receive additional discounts on professional fuel. Spain also released 11.5 million barrels of oil from its strategic reserves as part of the International Energy Agency’s plan.

Germany has chosen to regulate fuel station prices, allowing price increases only once per day, while refusing to resume purchases of Russian gas. Italy is considering using additional VAT revenues to compensate consumers and sanction companies that exploit the crisis. Portugal reduced fuel tax by 3.55 cents per liter, while Hungary imposed price caps on gasoline and diesel for vehicles with Hungarian license plates.

At the European level, Energy Commissioner Dan Jorgensen announced that the EU is considering temporary emergency measures in case of a “serious price crisis,” emphasizing that they should be targeted and time-limited without hindering the transition to clean energy. Financial Times reported that member states have been instructed to lower the gas storage filling target to 80% of capacity to ensure market stability.

As it appears, national measures vary from minimal support in France to massive financial packages like in Spain. The duration of the price crisis will depend directly on developments in the war and the blockade of the Strait of Hormuz.

“KORÇA BOOM”