Hormuz shock tests Europe as Brussels pushes AccelerateEU response

The closure of the Strait of Hormuz, following attacks by U.S. and Israeli forces against Iran, is driving a sharp increase in global energy prices and raising fears of a deeper economic shock if the blockade persists.

Roughly 20 million barrels per day of crude oil and petroleum products moved through the Strait in 2025, accounting for about 25 per cent of global seaborne oil trade. With limited alternative routes available, the disruption is constraining supply flows and amplifying price pressures across international markets.

For the EU, the crisis exposes structural vulnerabilities. The bloc relies on imports for more than 57 per cent of its energy consumption, leaving it highly exposed to external shocks.

While only a limited share of EU fossil fuel imports comes directly from Gulf countries, dependency varies significantly across Member States. Economies such as Greece, Poland, Italy and Belgium remain particularly exposed.

A crisis spreading across sectors

Since the start of the conflict, the EU has spent an additional €24 billion on fossil fuel imports. The increase is already feeding into inflation and weighing on growth prospects.

EU coordination mechanisms indicate that there is no immediate physical shortage, but the International Energy Agency has urged governments to take steps to curb demand and contain rising prices.

The impact is already extending beyond crude oil. Industry experts warn that jet fuel shortages could emerge as early as the end of May if supply constraints persist. Disruptions to fertilizer flows through the Strait could also spill over into agricultural markets, adding further economic strain.

EU rolls out AccelerateEU response

Brussels is now moving to contain the fallout. At the March European Council, they tasked the European Commission with preparing a set of targeted temporary measures to address the surge in fossil fuel prices linked to the Middle East crisis.

Following a mid-April pledge of rapid action by Commission President Ursula von der Leyen, the European Commission is set to present its response under the title AccelerateEU: Affordable and Secure Energy through Accelerated Action.

The plan combines immediate crisis tools with longer-term structural measures, built around five priorities: stronger EU coordination, protection for consumers and industry, faster deployment of domestic clean energy, reinforcement of the energy system, and increased investment.

Much of the package builds on the EU’s existing climate agenda.

The Commission argues that progress on the energy transition has already improved resilience, but acknowledges that the current crisis reinforces the need to accelerate electrification and expand homegrown energy production.

Key initiatives include pushing for a rapid agreement on the electricity grids package, advancing the Electrification Action Plan, and introducing a new electrification target.

The plan also promotes scaling up geothermal, biomethane and hydrogen, alongside faster electrification of heating and transport and short-term measures to reduce demand.

Alongside the Communication, the Commission issued a recommendation aimed at removing barriers to long-term energy contracts such as power purchase agreements, a central element of the recent electricity market reform.

Some elements revisit politically sensitive ground. While a dedicated annex on taxation was dropped, the Commission signalled upcoming legislative proposals on network charges and energy taxation, an area where previous efforts have stalled.

Other measures are more directly tailored to the current volatility. These include enhanced coordination between Member States, improved data sharing, and the creation of a Fuel Observatory to monitor production, imports and stock levels across the EU.

Brussels is also preparing a temporary State aid framework to support sectors most exposed to high energy costs.

Criticism mounts over limited ambition

On financing, the Commission is doubling down on the use of emissions trading revenues to support electrification, industrial decarbonisation and downstream applications that could help ease electricity prices. A Clean Energy Investment Summit is planned for 2026, alongside efforts to standardise financial products for building renovations and clean heating.

The response has exposed familiar divisions. Some Member States favour greater flexibility and emergency support, while others, particularly in the Nordic region, warn against subsidy-driven distortions of the single market. Critics argue the package leaves national governments carrying much of the burden.

Tensions have also surfaced over transport policy, where internal disagreements led to the watering down of demand-reduction measures amid concerns about the political cost of asking consumers to cut energy use.

Environmental groups and parts of the European Parliament have dismissed the plan as insufficient, arguing it fails to match the scale of the crisis.

Labeling the package “half measures,” Transport and Environment said the EU had bypassed critical steps, including targeting excess oil profits and fast-tracking the transition to electric vehicles. The Greens, alongside environmental NGOs such as Greenpeace and Climate Action Network Europe, echoed that criticism, warning that the Commission’s response falls short of the urgency required.