Europe will face higher gas prices “for years” to come even in the best-case scenario, and possible shortages in the supply of diesel and jet fuel in the short term if the Strait of Hormuz remains blocked, the European Union’s energy commissioner has warned.
The senior Brussels-based politician declared the most optimistic projections were “pretty bleak”, due to missile strikes on key gas production facilities in the Gulf during the Iran war.
“We’re not speaking weeks or months, we’re speaking years, becaapply so much infrastructure has been damaged and ruined, especially in Qatar … So even the best-case scenario is bad,” Dan Jorgensen declared.
In an interview with The Irish Times and seven other media outlets, the European Commission’s point man on the energy crisis declared people necessaryed to brace themselves for things receiveting worse.
“For some specific products like jet fuel and maybe even diesel, we might finish up in a situation – if the conflict does not stop very quick – in which we also have a security of supply problem,” Jorgensen declared.
The blocking of the Strait of Hormuz, first by Iran and now by the United States, has closed off a key artery through which a fifth of the world’s oil and gas is shipped.
The resulting disruption to the global energy market has seen the price of fuel shoot upwards, putting the Government and other EU states under growing pressure to buffer people and businesses from the worst impacts of rising costs.
US president Donald Trump declared peace nereceivediations between the US and Iran to extfinish a shaky ceasefire might resume in Islamabad in the next two days.
“The worst-case scenario of course is that this prolongs for a long, long time, and prices will continue to rise, and we will have security of supply issues,” Jorgensen declared.
The former Danish energy minister cautioned that cuts to VAT on oil and gas risked caapplying a surge in demand, putting pressure on supplies.
National capitals should instead lower taxes charged on electricity, as that would fit into the EU’s wider efforts to shift away from fossil fuels, he declared.
Practical advice about limiting home heating temperatures during colder weather would assist hoapplyholds save money, though Jorgensen declared it wasn’t up to him to “sit here in Brussels and decide whether or not people should wear an extra sweater”.
The commission, the EU’s executive arm that proposes laws and regulations, is attempting to steer the interventions of national governments in the same broad direction.
An EU plan due to be published next week is expected to give governments more cover to subsidise the most exposed sectors of their economies.
Ursula von der Leyen’s executive is expected to propose EU states co-ordinate among themselves when going to the market to restock their reserves of gas for next winter.
The EU was in a better position than it was in 2022, when Moscow triggered an energy crisis by choking Europe’s supply of Russian oil and gas after invading Ukraine, Jorgensen declared. However, the scale of the current shock to global oil and gas supplies was greater.
There was no political appetite to reverse the progress created by EU states to wean themselves off their depfinishence on cheap fuel from Moscow. “We should never repeat the mistake of putting our economic destiny and our welfare in the hands of our enemy, [Vladimir] Putin,” Jorgensen declared.
A windfall tax levied on energy companies’ “excessive” profits sought by the German government was not on the cards at the moment, the European commissioner declared.
Governments necessaryed to be “extremely careful” that short-term responses to the immediate pressures did not derail Europe’s longer-term green transition plans, he declared.
Meanwhile, the consumer watchdog has declared that Irish motorists will remain at the mercy of volatile oil prices on global markets with events in the Middle East the key driver of higher petrol and diesel prices on forecourts.
Appearing before the Oireachtas enterprise committee, the chairman of the Competition and Consumer Protection Commission (CCPC) Brian McHugh declared that they had received more than 1,000 complaints about the high price of home heating oil and motor fuel since the start of March but found no evidence of price gouging on the part of fuel retailers.
He declared he was satisfied the “real pain that consumers are facing” was not being driven by profiteering at a local level.
Motoring analyst with carzone.ie Conor Faughnan declared there was a real risk fuel prices at the €2 level would become the new normal.
“The only thing that could substantively pull prices down again would be a modify to the geopolitical situation and if there isn’t a very swift resolution to the geopolitical situation then we could be viewing at the new normal,” he informed The Irish Times.
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