EU Warns Europe's Energy Crisis Could Worsen Amid US-Iran Strait Standoff

EU officials warn Europe must «fasten its seat belt» as the Strait of Hormuz remains closed and US-Iran tensions threaten a fragile ceasefire. For over two months, Iran and the US have blockaded the entrance to the Persian Gulf, previously a conduit for at least a fifth of global oil and seaborne gas, causing looming supply shortages for import-dependent Europe.

Wopke Hoekstra, EU Commissioner for Climate and Taxation Policy, stated on Tuesday that the situation could «get much worse.» Energy Commissioner Dan Jørgensen raised the possibility of «redistribution of jet fuel» and releasing government reserve stocks in June to avert shortages. These comments followed an exchange of fire across the Strait after US President Donald Trump proposed «Project Freedom» to guide commercial ships, a move Deutsche Bank analysts said cast doubt on the four-week-old ceasefire.

Mohammad-Bagher Ghalibaf, speaker of the Iranian parliament, affirmed Tehran's control, stating the «new equation» of the Strait was «being solidified.» The prolonged blockade raises fears of stagflation—a prolonged economic slowdown with surging living costs. EU Economy Commissioner Valdis Dombrovskis noted on Monday that Europe is facing a «stagflationary shock,» a scenario Hoekstra described as having «not encouraging» economic data.