European Union prepares for potential energy crisis

The European Union is considering emergency measures, including energy consumption limits, to address growing threats to energy security. EU energy ministers are scheduled to discuss response scenarios on October 29, focusing on the 2026/2027 winter season.

Key drivers of the potential crisis include disruptions in oil and gas supplies from the Middle East, specifically due to conflicts affecting shipping through the Strait of Hormuz. Estimates suggest these disruptions impact 15-20 percent of the EU's oil imports, with diesel and aviation fuel being particularly vulnerable. Additionally, approximately 20 percent of global LNG supplies passing through the Strait of Hormuz in 2025 are at risk.

Gas storage levels in Europe were reported at just over 72 percent in early October, the lowest for this period since 2011. Market volatility is also rising, with gas prices exceeding 82 euro/MWh in mid-September and Brent crude oil maintaining prices near or above 100 dollars per barrel.

Further complicating the situation is the long-term decline in European refining capacity, with approximately 30 percent of refineries closed over the last 15 years. This has increased reliance on imports, leaving countries like France particularly exposed to supply shocks.