By Edan Macpherson
On the morning of March 2nd European gas traders got to their desks to see the price of oil had spiked 8% and gas prices about 20% – price shocks that affect the European public massively. The reason? Strikes against Iran by the United States and Israel had begun 4 days earlier, and the global aftermath on energy markets had begun. The price shock memory from 2021-2023 was becoming uncomfortably familiar for Europeans.
The Strait – Why it Matters
The Strait of Hormuz is an essential waterway that separates the Persian Gulf and the Gulf of Oman. Before the conflict, it supplied the world with roughly 20% of its daily oil supply and 20% of global liquefied natural gas. It provides the only sea passage from the Persian Gulf to the rest of the world and is one of the most important choke points on the planet. Currently, due to threats of Iranian mine and missile attacks, commercial tanker traffic has been brought to a near standstill: export volumes are currently at less than 10% of pre-conflict levels.
The direct damage to Qatar has further squeezed the LNG market. On March 2nd, Iranian drones struck QatarEnergy’s Ras Laffan facility, the hub through which Qatar supplies roughly a fifth of the world’s LNG. The strike forced an immediate shutdown of production. QatarEnergy declared force majeure, suspending its contractual obligations indefinitely. The timeline of restoring Qatari output is now under huge uncertainty: even if the conflict were to end now and the strait were to reopen, it could take months for production to restore. Qatar had become Europe’s single most important LNG supplier since the continent severed its dependence on Russian pipeline gas in 2022. The Ras Laffan shutdown is a particularly devastating blow for European importers.
Why Europe is so Exposed
What makes this situation especially dangerous for Europe is the timing. The continent entered 2026 with much lower gas storage levels than recent years: 46 billion cubic metres at the end of February 2026, compared to 60 bcm in 2025, and 77 bcm in 2024. The European Union rules require that storage is refilled to 90% capacity by December, meaning Europe must inject nearly 60 billion cubic meters of gas to meet that target. This target now looks extremely challenging.
Exacerbating this is the ongoing Russian gas phase-out. The EU is set to ban short-term Russian contracts in June of this year. The Russian gas was supposed to be replaced by American supply, yet due to the current Middle East conflict the plan looks far more precarious, placing immense strain on both supply and cost. Von der Leyen, the President of the European Commission, put a number on it: the first ten days of war alone cost European taxpayers an additional €3 billion in fossil fuel imports.
Is This 2022 again?
The parallels to the 2022 energy crisis are uncomfortable, but they are not exact. The comparison to Russia’s invasion of Ukraine, which sent oil prices above $120 per barrel and caused eurozone inflation to hit a record of 9%, may be excessive. Brent crude and European gas prices have surged sharply, but James Smith, developed markets economist at ING, argues that the economic picture looks vastly different from 2022. Europe has spent three years building regasification terminals, diversifying suppliers, and strengthening the very IEA coordination mechanism that has now been activated.
The International Energy Agency has authorised the largest ever emergency oil release of 400 million barrels from strategic reserves, a buffer that analysts note covers only around 20 days of normal Hormuz flows. Yet the man who authorised that release is not reassured. IEA Executive Director Fatih Birol has warned that the shock to international energy supplies from the war in Iran will exceed the 1970s oil crises and Ukraine combined. Whether the reserve release proves sufficient depends entirely on one thing: how long the conflict lasts.
The Second Warning
Europe’s vulnerability to this crisis was not created on 28 February 2026. It was years in the making — a structural dependence on imported energy that survived the Russia shock and has now been exposed a second time within a lustrum. The immediate priority is getting through next winter. The larger one is making sure there is no third time.
The views expressed in this article are the author’s own, and may not reflect the opinions of The St Andrews Economist
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