The war in Iran has delivered another shock to the EU’s energy system, highlighting the region’s vulnerability during geopolitical crises, even though member states do not purchase significant amounts of gas and oil from Middle Eastern countries.

LNG now represents about 35–40% of EU gas consumption, highlighting Europe’s shift toward LNG imports following the decline in Russian pipeline supplies. The United States has emerged as the largest supplier, providing around 60% of EU LNG imports in February, while Qatar accounted for roughly 10%, as the majority of its cargoes are still directed to Asian buyers.

However, a study released last week by Ember, an independent climate and energy think tank, shows that European countries heavily reliant on gas, including Germany, Italy, and the Netherlands, are more exposed to energy price spikes than others.

According to Ember, the sharp rise in European gas prices since the conflict began on February 28 has pushed gas-fired electricity generation costs up by more than 50% in just 10 days, adding about twice as much to costs as the EU ETS carbon price.

“At current gas prices, the carbon cost constitutes at most a fifth of this cost segment, translating into at most 10% of the final electricity bill,” the report said, adding that “this is less than the average VAT rate on electricity, which was 18% in 2024.”

Ahead of the European Council meeting scheduled for this week, Italian Prime Minister Giorgia Meloni told Parliament that she will ask for an immediate and temporary suspension of the EU ETS for fossil fuel generation, calling it “a measure that is needed now, and at least until global fossil fuel prices return to the levels they were at before the Middle East crisis.”