Europe Panics as Energy Prices Rise, Iran War Paves Way for Russian Oil
JAKARTA - The Iran war has shaken the world's oil and gas supply, forcing the European Union to move quickly to contain the impact. The Guardian, two days ago as quoted Thursday, March 12, reported a spike in oil prices that had approached US$120 per barrel in 24 hours, making Brussels and member countries busy preparing emergency measures.
Europe's anxiety is not just about prices. European Council President António Costa judged that the biggest winner of this conflict is Vladimir Putin. When supplies from the Gulf region are stalled, Russia can enter to fill the market gap. That is why the European Commission urges the United States to continue to enforce the price limit on Russian oil, after Washington partially relaxed oil-related sanctions to hold back global price spikes.
Still from The Guardian's report, European Economic Commissioner Valdis Dombrovskis emphasized that easing Russia's oil could backfire. At the same time, EU commissioners discussed options to ease the burden on consumers and industry, ranging from changes to energy taxes to revisions to carbon pricing.
Eurostat data shows that the EU's largest oil import value this year comes from the United States, at 15 percent, followed by Norway at 14 percent, Kazakhstan at 13 percent, and the Gulf countries at 12 percent. However, the global price spike has opened up a long-standing vulnerability: that is, energy in Europe is already expensive even before the war is spreading.
The response of each country is different. France deployed inspections to 500 gas stations to prevent excessive price increases. Italy threatened to raise taxes on companies accused of profiting from the crisis. Germany refused to ease sanctions against Russia and chose to remain on Ukraine's side. Austria actually encouraged a temporary cut in gasoline taxes.
Hungary and Croatia became the first two countries in the European Union to set fuel prices. Viktor Orbán also announced the release of state reserves and again urged the cessation of energy sanctions against Russia.
In other countries, Sweden's SAS airline raised fares temporarily, while Ireland faced new anxiety over soaring heating oil costs. Amid this pressure, Europe faces a dilemma of containing the energy crisis without opening up more space for Russia.