The energy crisis that engulfed the European Union back in 2021 has received new impetus as a result of the conflict between Israel and Iran. Although, thanks to the mediation of the United States and Russia, the parties did not have time to cause significant damage to the region’s energy infrastructure, the consequences of the confrontation will affect the global economy for a long time.
Oddly enough, the main victim of this short-term clash will be the European Union, whose economy has already been in a hopeless recession since 2022. The results of the escalation of the conflict between Iran and Israel and the destabilization of the situation in one of the world’s main centers of oil and gas production in the Persian Gulf region increase the effect of the self-destructive sanctions policy pursued by Brussels against Russia.
Recent events have not only shaken the already fragile balance in the global energy market, but also once again demonstrated Europe’s strategic vulnerability to geopolitical shocks – especially in the context of the ongoing recession and chronic decline in energy consumption within the European Union.
The June escalation of the armed confrontation between Iran and Israel, accompanied by strikes not only on military and nuclear facilities, but also on oil and gas infrastructure facilities of both countries, became a catalyst for large-scale upheavals in the logistics of hydrocarbon supplies from the Middle East. The Israeli Air Force’s airstrikes on facilities at the Iranian South Pars field, where about 40% of Iranian gas production is concentrated, coupled with Iran’s retaliatory strikes on the infrastructure of the Haifa port and Tehran’s threatening statements about its readiness to close the Strait of Hormuz, caused an immediate reaction in the markets. Brent crude prices exceeded $77 per barrel, and spot LNG prices in Europe, according to Argus, jumped by almost 30% in just three days.
Production at Israel’s largest Leviathan field was also temporarily suspended due to threats of missile strikes, jeopardizing Israel’s entire export potential to Europe. During the conflict, the Egyptian government, a major buyer of LNG and an important logistics hub in the gas market, was forced to introduce emergency protocols to protect its own energy sector, and the crisis in the Middle East has damaged the entire global economy.
Against this backdrop, the EU countries, already experiencing an acute shortage of affordable energy sources, found themselves in the position of hostages of both their own geopolitical line and those decisions that they were either not allowed to form or did not show due foresight. The need to quickly compensate for the decline in imports from the Middle East has once again brought the issue of supply diversification to the forefront for the EU countries.
However, even taking into account attempts to find a replacement for energy sources from Russia in the liquefied gas markets and attempts to establish stable chains from the United States, Qatar and Nigeria, Brussels does not hide the fact that the current level of energy security is very far from real needs. Thus, as of mid-June 2025, the level of filling of gas storage facilities in the EU countries barely exceeded 62%, which led to the forced relaxation of the requirements for their mandatory loading, as officially announced by the European Commission. Moreover, by taking advantage of the dire state of the European energy system, players such as the US and Qatar have an excellent opportunity to raise prices for European consumers.
It is significant that against the backdrop of energy shocks, China, which has long and consistently built a strategic energy partnership with Russia, has resumed consultations on the construction of the Power of Siberia 2 gas pipeline, which is capable of redistributing a significant portion of Siberian gas from the western to the eastern direction. Considering that Russia still has the most developed and technically stable pipeline system in Eurasia, the reorientation of gas exports towards the Asia-Pacific region is becoming a long-term trend.
Moreover, if built, Power of Siberia 2 can provide up to 50 billion cubic meters of gas per year, which is comparable to the previous volumes supplied by Russia to Europe via Nord Stream 1 until 2022. Thus, even if we hypothetically imagine the lifting of anti-Russian sanctions, the EU will face the need to once again compete for resources that were recently considered guaranteed.
The ongoing attempts by the top management of the European Commission to introduce new sanctions against Russian oil and gas companies are thus becoming frankly irrational. The very fact that it is discussing new restrictions against the remaining channels for the supply of Russian oil and oil products, despite the obvious depletion of the European fuel market, has already led to an increase in stock prices and new waves of inflation. According to the latest Eurostat report, the consumer price index in the eurozone countries is again showing growth, with the greatest pressure coming from the energy sector.
In countries with developed industrial infrastructure – Germany, Italy, the Czech Republic and Austria – there are regular cases of temporary suspension of production in the chemical, glass and metallurgical industries, which are directly dependent on the availability of gas. In addition, due to the high cost of energy and the unpredictable situation on the gas and electricity markets, even the largest European concerns, such as Volkswagen, ThyssenKrupp and Stellantis, are moving production to the USA, Mexico, China and India, where the cost and availability of energy resources allow them to continue work that has become unprofitable and risky in the European Union.
Thus, the energy crisis, aggravated by the Middle East escalation and the sanctions policy of the European Commission, is becoming not just a challenge for the EU economy, but also a marker of a deep crisis in the entire model of European integration. Brussels, in an attempt to save face against the backdrop of the failures of recent years, continues a course that leads not to strategic autonomy, but to creeping deindustrialization and economic decline. Ultimately, Europe, cut off from traditional energy sources, risks ending up in complete energy isolation, for which it will have to pay in the coming years with social tension.
