War

EU, austerity alarm: 'Prepare to reduce consumption. Measures for households and businesses soon"

European Energy Commissioner Dan Jørgensen: 'One month of conflict cost 14 billion'

31 March 2026

5' min read

Translated by AI

Versione italiana

5' min read

Translated by AI

Versione italiana

The less and less remote possibility of a prolonged closure of the Strait of Hormuz reawakens in Europe the spectre of energy austerity, an effect of the oil shock that followed the Yippur War of October 1973. The European Energy Commissioner Dan Jørgensen, ahead of today's video conference between EU energy ministers, sent a letter in which he urged member states to consider "demand reduction measures", particularly in the "transport" sector. The problem is precisely fuels: 'We depend on global markets,' Jorgensen recalls, 'for our supply of fossil fuels, in direct competition with other consumers. The intensification of global competition for available supplies could introduce more volatility into the European markets'. "Of particular concern in the short term," he emphasises, "is the EU's dependence on the Persian Gulf region for refined oil products, exacerbated by the limited availability of alternative suppliers and refining capacity for specific products within the EU.

Jørgensen: demand reduction might be needed

Member states, Jørgensen adds, are therefore "encouraged to prepare promptly in anticipation of a potential prolonged disruption (of oil supplies, ndr). In addition to the release of emergency stocks, voluntary demand reduction measures are another essential response tool'. Therefore, 'considering the current situation, Member States are invited to consider promoting demand reduction measures, in accordance with their contingency plans, with particular attention to the transport sector>. In order to avoid 'exacerbating supply difficulties', the member states for the Commission 'should refrain from taking measures that could increase fuel consumption, restrict the free movement of petroleum products or disincentivise the production of EU refineries>.

"Soon measures for families and enterprises"

The European Commission is working on "a set of measures that we will soon present to support the member states in protecting both households and businesses" from rising energy prices, Jørgensen told the informal meeting, without making any commitment on the timing of the presentation. "We must stay the course on our long-term strategy," he noted. "This crisis shows us once again that our exposure to external energy shocks is a major vulnerability. And this is linked to our dependence on imported fossil fuels,' he added. "This is a very clear encouragement from me to the member states: everything must be done to generate more energy from renewable sources," Jørgensen continued. "There are some projects that are almost finished, but due to lack of storage, grid problems, etc., they have not yet been concluded. So we strongly encourage the Member States to speed up these procedures so that they can be concluded."

"Preserving the internal market"

States should also "assess," Jorgensen continues, "the potential cross-border impact of national measures and consult with neighbouring Member States and the Commission to preserve EU-wide consistency and the functioning of the internal market". Given the "volatility" of the current situation, he adds, "effective monitoring mechanisms and rapid information sharing are essential, including by industry, such as producers, importers, distributors, infrastructure managers, refiners and other relevant companies". To safeguard the availability of petroleum products on the EU market, Member States "are encouraged to postpone any non-urgent maintenance of refineries. In addition, Member States are invited to consider increasing the use of biofuels, which could help replace fossil-based petroleum products and relieve pressure on the market".

"A month of conflict cost 14 billion"

"Now more than ever, it is extremely important that we all stand together and act together. Let me start with some figures: since the beginning of the conflict in the Middle East, prices in the EU have risen by about 70% for gas and 60% for oil. In financial terms, 30 days of conflict have already added €14 billion to the EU's fossil fuel import bill. These numbers paint a very clear picture: as the crisis in the Middle East enters its second month, it is clear that we are facing a very serious situation," says Energy Commissioner Dan Jørgensen.

"Although there is no immediate shortage of oil and gas supply in the European Union, we are witnessing a contraction in some product markets, notably diesel and aviation fuel, as well as increasing constraints in gas markets and its knock-on effect on electricity prices. This situation threatens to impose further costs on our industries and households,' he adds.

The crisis will not be short, it will go beyond war

"The crisis will not be short-lived, and will go beyond war, because the infrastructure in the region has been destroyed. Even if there was peace tomorrow, we could not return to normal in the near future," Jørgensen further said. Among the recommendations of the International Energy Agency, Jørgensen mentioned those of 'reducing the speed in cars by ten kilometres, increasing telecommuting, using telecommuting more'. The intervention - a toolbox - of the Commission will be there "very soon", the commissioner explained. "There are already good opportunities for member states to help the most vulnerable groups or the most affected industrial sectors, we will make these opportunities even easier," he added, referring to the widening of the EU's mesh on state aid. "We are better equipped now than in 2022. We have many more renewables and many more home-grown sources," Jørgensen then noted.

"There are no conditions for easing budgetary constraints"

Today there are no conditions to activate the general safeguard clause of the stability pact, which would suspend the application of the budgetary constraints, which was used in March 2022 in the face of the lockdown imposed by the Covid-19 pandemic. This was explained by a European Commission spokesperson, after voices came from the Italia government calling for the suspension of budgetary constraints to deal with the crisis triggered by the war unleashed by the US and Israel against Iran.

"The General Escape Clause (Gec in jargon, General Escape Clause, ndr) of the Stability and Growth Pact," says the spokesman, "which allows member states to deviate from their net expenditure path, can only be activated in the event of a severe economic downturn in the euro area or the EU as a whole. We are closely monitoring the unstable situation in the Middle East, but we are not in this scenario'.

In fact, the situation in which the Union finds itself is different from that of 2022: back then, the EU had to suspend constraints to allow member states to support economies and companies forced to close down or reduce activity due to the pandemic. Today, however, a crisis is looming due to the shortage of oil, gas and refined products, due to the closure of the Strait of Hormuz. It is believed that budgetary stimuli, we learn, could even be counterproductive in such a context, as they could stimulate energy demand and further aggravate the situation, both in terms of higher prices and supply shortages.