The European Union had years to prepare itself for an energy crisis after the 2022 shock. Thanks to a warm winter and ample supply from the United States, the European gas crisis was significantly less severe than feared. However, the continent avoided blackouts and an economic collapse due to the combination of good luck with weather and excess productive capacity in the United States.
Instead of acknowledging the luck factor, the European Union continued to do nothing serious about security of supply, while some countries maintained the nuclear shutdown, which has left them vulnerable to future energy shortages. Instead of creating a plan to eliminate the bans on resource development, nuclear shutdowns, and limits to investment, the European Union preferred to hide its head in the sand, expecting that nothing would happen.
Europe is sleepwalking into another energy crisis, which could be worse than the 2022 shock. The Middle East war, a new diplomatic crisis between Spain and the United States, the ongoing conflict with Algeria, and the unresolved dependency on Russian gas supply have combined to drive soaring oil and gas prices, posing a threat to the already fragile European economy.
The escalation of the Iran war has affected most of the traffic through the Strait of Hormuz. Daily ship traffic through the strait has fallen from 138 vessels to twenty, according to vessel-tracking data. Kuwait and Qatar have declared force majeure, which means that all existing contracts can be revised in terms of quantity and price, while Kuwait and the Emirates have cut crude oil production due to Iran’s threats.
Brent crude has already surged past $90, rising 21% in a single week, the largest weekly gain in five years. U.S. gasoline prices have risen to $4.0 a gallon, still lower than the average for 2021–2023. However, for Europe, the natural gas picture is even more alarming.
The Dutch TTF natural gas benchmark has soared 50% per week, the largest since summer 2023. The April 2026 TTF contract hit $58.42/MWh, up from $37/MWh only a week before. Implied volatility in TTF futures has multiplied by four since January.
Qatar, the world’s second-largest liquefied natural gas (LNG) exporter, has stopped production at Ras Laffan, the world’s biggest liquefaction facility, and issued force majeure notices. Qatar and the UAE supply more than 20% of the global LNG supply and are now offline. According to Kpler, a realistic approach to alternative supply from all possible sources totals less than 2 million tons/month, against a 5.8-million-ton monthly loss.
Europe was not prepared for the disruption and has done very little to guarantee long-term supply. Calling force majeure allows suppliers to manage contracts in the most efficient way considering the risks, which is crucial in the current context of supply shortages and the need for flexibility in contract management.
China did set security of supply as a priority. LNG ships originally bound for Europe are being diverted to Asia. Why? This is due to the fact that Asian spot premiums are now outbidding European prices, indicating the strongest arbitrage signal since 2022, as reported by Reuters. Three vessels carrying U.S. and Nigerian LNG were diverted toward Asia this week alone. Europe is experiencing a loss in the global bidding war for flexible tankers.
Simultaneously, the depletion of European gas storage sites has reached its lowest levels in years. Europe requires a significant influx of cargoes in the spring and summer to replenish storage even after the heating season ends on March 31. The storage build will be more difficult and significantly more expensive due to increased competition for liquefied natural gas (LNG) and potential supply chain disruptions exacerbated by geopolitical tensions.
Spain’s deteriorating diplomatic relationship with the United States adds another dangerous dimension. The Sánchez government’s foreign policy change, driven by provocative rhetoric, alignment with positions hostile to U.S. interests, and tensions over defense cooperation, has isolated Madrid diplomatically at precisely the wrong moment.
Spain’s largest suppliers of liquefied natural gas are Algeria and the United States. The Sánchez government has created diplomatic incidents with both nations. Spain’s six regasification terminals are essential for European LNG logistics, but only if cargoes arrive. In a supply-limited market where the U.S. is the world’s largest LNG exporter, a diplomatic crisis with Washington is not just a political problem; it is an energy supply risk. U.S. LNG producers and traders may decide to divert direct flexible cargoes, and political signals matter, particularly if tensions escalate and affect trade agreements or shipping routes.
Spain’s poor diplomatic relationship with Algeria over the Western Sahara issue has also been a major driver of the reduction of Algerian gas volumes into Spain.
The risk of another Russian gas supply cut increases even more. While Europe has reduced dependence on Russian pipeline gas since 2022, from 40% to 15%, significant flows continue, primarily through TurkStream to southern and southeastern Europe. European purchases of Russian gas reached over 40 billion cubic meters and were worth €15 billion in 2025. Despite an announced 2027 phase-out, the EU still imports large volumes of LNG (liquefied natural gas) from Russia, delivered to Spain, France, and Belgium in particular, making Russia the second-largest supplier in the third quarter of 2025, with a 12.7% share.
Spain, the fifth-highest importer, purchased 114mn euro of Russian LNG in January. France’s LNG imports from Russia saw a massive 57% month-on-month increase, while its total import volumes saw a much more modest 15% increase, according to CREA.
A complete Russian shutdown, added to the Middle East disruption and likely reduction in US volumes, would push Europe into an unprecedented energy crisis that would even involve rationing. Germany’s industrial recession, already in its third consecutive year, would worsen. Spain, Italy, and Central European economies would face double-digit energy cost inflation and a significant slump in industrial production and domestic consumption.
The IEA’s own winter assessments warned repeatedly about tight gas markets in the event of any supply disruptions. No one in Brussels listened. Now it is unfolding.
Europe’s political class spent three years congratulating itself for surviving the 2022 energy crisis. However, they achieved this survival by destroying demand, dismantling industries, restricting consumption, and paying significantly higher prices. The European energy sector’s vulnerabilities were never addressed. Meanwhile, domestic production declined, nuclear capacity was reduced and dependency increased, while bureaucracy made it even more difficult to invest in energy security, leading to a precarious situation where Europe is now vulnerable to external shocks and supply disruptions.
Now, with oil approaching $90-100/barrel, gas prices doubling in a week, the Strait of Hormuz effectively closed, Qatar’s LNG offline, and some countries engaged in diplomatic disputes with their most important energy supplier ally, Europe faces the consequences of its own complacency.
The European energy crisis is a clear threat. European leaders must listen to industry experts and respond with logic, not ideology, acknowledging the crisis risk. Unfortunately, many European leaders live under the comforting illusion that someone else will solve the problem, while others, like Spain’s Sanchez, prefer the crisis, expecting some elusive political benefit that may divert attention from the corruption scandals he faces, which ultimately hinders effective action and prolongs the resolution of the crisis.
