How Europe will pay for the US and Israel's war in Iran.
Europe heads into winter with depleted gas reserves and prices close to three times February levels, exposing households and businesses if temperatures drop. The US and Israel's war against Iran has disrupted supplies just when the continent needs enough fuel to cover peak heating demand.
The European gas index crossed the 100 euro mark per megawatt-hour on October 28 for the first time since 2022. According to the EU's energy regulator ACER, EU storage was only 75% full on October 21, leaving a much thinner cushion against cold weather and import disruptions.
Europe's growing reliance on liquefied natural gas, which comes from containers, makes the Asian cold crisis a European problem as well. Buyers compete for the available cargoes, so high demand in Asia can push up the price Europe has to pay even when its weather remains mild.
According to ACER, no significant quantities of Qatari liquefied gas arrived in the Union during the summer. US supplies currently make up about 30% of the bloc's total gas supply, while Qatari and Russian supplies have decreased. Reducing dependence on Russia has left Europe more exposed to American exports and competition in global freight markets.
The cost goes far beyond the heating bills. European Union Commission President Ursula von der Leyen says closing the Hormuz complex has added €127 billion to Europe's fossil fuel import bill without buying any additional energy. Already heavily indebted governments face pressure to support consumers while businesses absorb higher operating costs.
Bloomberg describes a 182-year-old German porcelain factory preparing to close its kilns, and Polish fertilizer producers seeking government intervention. For industries that need large amounts of heat or gas, prolonged high prices can turn a temporary cut in production into a permanent shutdown.