Europe weighs energy-saving measures as Middle East crisis deepens

[EU Weighing Energy Demand Reductions Amid Escalating Middle East Crisis]

EU governments could ask households and businesses to cut their energy use as the war in the Middle East drives up prices and threatens oil and gas supplies, according to a document seen by Euronews.

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Energy ministers will discuss possible EU-wide measures to reduce consumption when they meet on 29 October, amid growing fears that disruption to supplies through the Strait of Hormuz could persist for months.

The proposal to consider demand cuts comes from Ireland, which currently holds the rotating presidency of the Council of the EU and is chairing negotiations between member states.

Gas prices have surged by 140% since the US and Israel launched their war against Iran, while Brent crude was trading at $110 a barrel on Wednesday. Even if the conflict ends, its impact on oil markets could last for months, while the consequences for gas supplies could be felt for years, the Irish presidency warns.

EU officials have so far identified energy prices as the biggest ripple effect coming from the Middle East, even though Energy Commissioner Dan Jørgensen has urged capitals in September, for the second time, to consider energy demand cuts.

The EU’s gas transmission operators recently warned that the bloc could face a gas shortfall of 12% to 15% of demand if a severe cold snap hits this winter. Storage levels are at 74% as of 20 October, according to data from the industry body Gas Infrastructure Europe, their lowest since 2011.

Nearly eight months after military attacks led to the closure of the Strait of Hormuz, a key chokepoint accounting for 20% of the world’s oil and gas transit, diesel and jet fuel are particularly exposed to price and potential supply disruptions.

EU weighs demand cuts

With the European Commission running out of options to cushion the impact of the crisis, ministers will consider whether reducing consumption should become part of the EU’s response, alongside emergency stock releases and financial support.

“What are the lessons learned from EU coordination in responding to energy impacts as a result of the Middle East Conflict, and how should the EU prepare for a scenario in which the Strait of Hormuz remains partially or fully closed in the months ahead? What, if any, demand reduction measures should be considered at EU level?,” reads the Council document.

The Council document does not propose specific energy cuts or establish that ministers have agreed to them. But it sets the stage to assess how far EU capitals are willing to go in managing consumption if supply disruptions persist.

The debate signals a growing recognition that the EU can’t guarantee energy security through imports and emergency stock releases alone if a major supply route remains blocked.

French President Emmanuel Macron secured diesel from Gulf countries on Tuesday after Saudi Arabia offered additional spot crude cargoes for delivery to Europe from late October to mid-November. The move followed the G7 agreement to release more emergency oil stocks, under pressure from Washington.

Meanwhile, the International Energy Agency (IEA) said it is ready to coordinate more emergency oil releases by member countries if they wish to do so in order to counter rising prices.

Spain confirmed it would release 4.4 million barrels of strategic oil stocks during October, as part of its existing emergency commitment.

More car-free Sundays?

Shortly after the US-Israeli military attacks against Iran, the Paris-based IEA also announced a 10-point plan for countries to cut oil use, including “Car-free Sundays”, a practice widely used during the energy crisis in the 1970s.

Other measures could range from voluntary appeals to households and businesses to save energy to targeted restrictions on consumption by particular sectors, depending on the severity of the crisis.

However, any EU-wide initiative would raise questions over who should bear the burden, whether industry should face restrictions and how to protect vulnerable households without further damaging the bloc’s competitiveness.

The central question for ministers is whether demand reduction should be coordinated at EU level or left to national governments.

A common approach could help prevent countries from competing for scarce supplies, but EU governments face different levels of exposure to gas shortages, different electricity prices and different industrial needs.

A proposal from the Commission tabled at the 15-16 October Council summit to aggregate energy demand at the EU level is also currently on the table for capitals to assess. The goal is for Brussels to coordinate energy demand and distribute it to EU countries based on their needs.

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