EU Energy Crisis: Von der Leyen Warns of €500M Daily Cost Amid Iran War and Hormuz Blockade

European Union countries must funnel their energy aid chiefly to vulnerable households and industries or risk wasting billions of euros as the Iran war hits oil and gas prices, European Commission President Ursula von der Leyen warned on Wednesday.

The U.S.-Israel war, combined with retaliation from Iran such as choking the Strait of Hormuz, is costing the EU almost 500 million euros ($600 million) a day, raising prices at the pumps and fears of a jet fuel shortage within weeks.

Von der Leyen said the world’s biggest trading bloc must draw on the lessons of the 2022 fuel crisis – when Russia used its energy might against European countries to undermine their support for Ukraine – to avoid further hurting their economies.

More than 350 billion euros “were spent on untargeted measures and this had a huge impact on member states finances,” she told EU lawmakers in Strasbourg, France. “So let us not make the same mistake again, and let’s focus our support where it matters most.”

Just as Europe broke its energy dependency on Russia, the bloc must now end its reliance on supplies from the outside world, by making better use of renewable sources like wind and solar, as well as nuclear power, von der Leyen said.

“Our over dependency on imported fossil fuels makes us vulnerable,” she said.

Since the war started in 2022, Russian gas imports into the 27 nations have fallen from 45% to 12% last year. Coal imports were banned by sanctions, and oil imports shrank from 27% 2022 to 2%, with only Hungary and Slovakia continuing to buy from Russia.

Von der Leyen said the impact of the Iran war “may echo for months or even years to come” and that the path to energy independence lies in “homegrown, affordable, clean energy supply from renewables to nuclear.”

She urged EU countries to use more electricity generated by renewable sources and nuclear sources to power transport and planes, heat homes, and undercut the dependency on fossil fuels in industry.

Electricity makes up less than a quarter of the bloc’s energy consumption.

EU Energy Commissioner Dan Jørgensen warned last week that the Iran war has not just produced “a short-term, small increase in prices. This is a crisis that is probably as serious as the 1973 and the 2022 crises combined.”

He said Europe has been forced onto the defensive and has little control over events.

“Even in a best-case scenario, it’s still bad,” Jørgensen said. “Whether or not we will be in a security of supply crisis is primarily a result of what goes on in the Middle East. What we can do is to try and prevent, and limit” the damage.

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