Iran war: how to exit the energy crisis?
The escalating situation in the Middle East and the blockade of the Strait of Hormuz are causing energy prices to skyrocket worldwide. Even after Donald Trump hinted on Monday that the war could end very soon and G7 countries discussed drawing on strategic oil reserves, prices remain well above their level at the end of February. The European press assesses causes, consequences and possible solutions.
Price of oil is tip of the iceberg
The longer the war goes on the greater the risk of an economic spiral, warns the Irish Independent:
“The price of oil goes up, costs across the economy go up, causing higher prices inflation, with the potential for lost growth, job losses and unemployment. To combat inflation, central banks raise interest rates, which drive up mortgages. The duration of this war will directly impact upon economies. It’s not just the price at the pumps that will rise.”
Strategic reserves: more harm than good?
In view of the lack of oil supplies from the Gulf region the G7 countries are considering using their strategic oil reserves. This is worrying, warns De Standaard:
“The problem is that such an emergency measure to calm the markets only confirms how acute the energy shortage is likely to become. The International Energy Agency has only drawn on these reserves five times in the past 50 years, the last two times were after Russia's invasion of Ukraine. This energy shock has left European industry lagging almost irretrievably behind its Chinese and American competitors.”
EU must rally together quickly
The EU urgently needs to push through long-overdue reforms, warns El Mundo:
“Unlike the US, which is a net exporter of hydrocarbons and can better cushion the impact of a prolonged supply shortage, the old continent is still an energy-deficit market and vulnerable to any supply shocks. ... Since 2022 the EU should have been making a lot more progress on the integration of its markets, on energy autonomy, on competitiveness and on developing a joint security strategy. It has not being doing this with necessary urgency and now it is paying the price. ... The only way forward for Europe is unity in pushing through the pending reforms.”
Time to ditch fossil fuels
Polityka calls for greater energy independence:
“The current energy crisis shows how little we learned from the previous one. Many politicians still seem to believe that we should remain completely dependent on oil and gas, brushing off any attempts to develop renewable energy sources as ideological nonsense. ... Until now the electrification of transport or heat supply has been presented mainly as a method of reducing CO2 emissions. However switching to heat pumps or electric cars - even if it's costly and has its drawbacks - will enable us to increase our energy independence. Otherwise, both Poland and Europe will have to keep paying for wars that others have started.”
Overcome dependence on Strait of Hormuz
In the long term there needs to be logistical alternative to the Strait of Hormuz, Contributors argues:
“Looking ahead, it's unlikely that the Strait of Hormuz will lose its importance in the coming decades. Even in an optimistic energy transition scenario, oil and gas from the Persian Gulf will continue to be transported through this channel meaning that crises such as the one in 2026 could happen again. This is precisely why one of the great intellectual and political challenges of the 21st century is to build a global energy system that is not existentially dependent on one narrow stretch of water.”
Allow Russian imports again
The EU's decision to stop buying Russian oil and gas was a mistake, the pro-government daily Magyar Nemzet argues:
“Thanks to the earlier European Union ban on imports of Russian energy sources, the war in the Middle East has had a far greater impact on the European energy sector, as Europe not only has shortages of oil and other energy sources due to the war, but there is also a deficit on the European market due to the exclusion of Russia. ... The solution is clear: support for the war in Ukraine must end, Russian oil and gas must be allowed in, and the focus should be on European competitiveness.”