EU Warns: Oil and Gas Prices Will Not Fall Even if the War with Iran Ends

The EU has warned that oil and gas prices will not decrease anytime soon, even if the war involving Iran comes to an end, citing pressure on fuel supplies and tight global markets, while preparing support measures for households and businesses.
Sky-high oil and gas prices in Europe, as a result of the ongoing war involving Iran, will not return to normal levels soon—even if peace were declared tomorrow—the European Union’s energy commissioner warned on Tuesday.
Commissioner Dan Jørgensen said that although there are no immediate shortages of oil and gas supplies across the 27-member bloc, there is pressure on supplies of oil and jet fuel, as well as “increasing constraints” in global gas markets, which are driving up electricity prices.
“What I consider extremely important is to state as clearly as possible that even if peace arrives tomorrow, we still will not return to normality in the foreseeable future,” Jørgensen said at a press conference after a meeting of EU energy ministers.
He said the EU’s executive arm is preparing a series of measures to help families and businesses cope with the sharp rise in oil prices, which has led to increases of about 70% for gas and 60% for oil in Europe. Since the beginning of the war, the EU’s bill for imported fossil fuels has increased by €14 billion, according to Jørgensen.
He added that closely coordinated action among all EU member states is necessary to “avoid fragmented national responses and disruptive signals to the markets.”
The package of measures being prepared will be unveiled “very soon” and will include ways to make it easier for states to decouple gas prices from electricity prices. A reduction in electricity taxes is also being considered, as suggested by European Commission President Ursula von der Leyen.
Jørgensen said that although he does not expect a repeat of the 2022 natural gas crisis—during which companies made huge profits from soaring prices—a one-off “windfall tax” on such companies “remains an option.”
There are now “good opportunities” for member states to provide financial support to vulnerable groups and industries under “extraordinary stress,” and the Commission will make these opportunities “even simpler and broader,” he said.
Jørgensen also encouraged EU countries to consider the International Energy Agency’s 10-point plan, which includes working from home, reducing highway speed limits, promoting public transport, and increasing carpooling.
He said the EU remains committed to banning purchases of Russian gas, aiming to reduce dependence on Russian supplies and cut funding for Russia’s war in Ukraine. Dependence on Russian gas has fallen from 45% before the war to 10% now and is expected to drop to zero once imports from alternative suppliers increase, especially from the United States. The EU is also exploring new energy sources from Azerbaijan, Algeria, and Canada, as well as smaller producers around the world.
The commissioner warned that the EU must never “repeat the mistakes of the past by allowing Putin to use energy as a weapon against us and to blackmail member states.” He added that it would be “completely unacceptable” for the EU to continue buying energy that would “indirectly help finance the terrible war that Putin is waging in Ukraine.”/Euronews.com