European Union nations have paid an additional $113.5 billion for energy imports since the outbreak of the Iran war, without receiving any extra oil or gas, according to fortune.com. This surge in costs follows the closure of the Strait of Hormuz, a key route for about 20% of the world’s traded oil. Consumers in some European countries now pay nearly 50% more at the pump, with prices exceeding $11 per gallon.
The EU’s energy commissioner, Dan Jørgensen, highlighted the seriousness of the situation during a meeting of energy ministers from the 27-member bloc in Dublin. The ministers are discussing plans to accelerate the transition from fossil fuels to electricity and to expand electrical infrastructure across Europe. This shift became urgent after Europe ended its reliance on Russian energy following Russia’s full-scale invasion of Ukraine in 2022, increasing dependence on U.S. imports.
The International Energy Agency’s executive director, Fatih Birol, noted that Europe is highly exposed to diesel supply risks, as about half of its diesel comes directly from the U.S. The approaching winter season adds pressure on diesel demand. Meanwhile, some U.S. states have called for a ban on diesel exports to protect domestic supply ahead of upcoming elections, which could further impact European energy availability and prices.
The EU’s energy ministers are set to continue discussions on energy diversification and infrastructure expansion during upcoming sessions, aiming to reduce the bloc’s vulnerability to geopolitical disruptions. The current energy cost surge underscores the urgency of these efforts as Europe faces a challenging winter season.