EU plans emergency measures to curb energy costs as Iran war hits markets

The European Union will take steps to ease the impact of surging energy prices caused by the US-Israeli war against Iran, European Commission President Ursula von der Leyen says, while stopping short of major market interventions such as capping gas prices.

In a letter to EU leaders before a Brussels summit on Thursday, she lays out plans focused on making more carbon-emissions permits available in the bloc’s market and providing more financial aid to industries. The proposal omits more radical measures called for by a handful of governments such as a redesign of the EU’s electricity market.

Europe’s heavy reliance on imported fuels means it is highly exposed to global price swings, and governments want to avoid a repeat of Europe’s 2022 energy crunch, when prices hit record highs after Russia cut gas supplies.

The EU imports most of its oil and gas from the US, Norway, and other suppliers that are not directly affected by Middle East supply cuts.

“At present, the physical security of supply of the European Union is assured. But the increase of fossil fuel prices is already weighing on our economy,” von der Leyen says.

She says the EU’s bill for oil and gas imports increased by 6 billion euros during the Iran conflict, which began on February 28.