EU pays extra €100bn for energy without securing more oil or gas

The European Union paid an additional bill of more than €100 billion during the year due to volatility in global energy markets. Despite this heavy expenditure, no increase was achieved in the volume of oil and gas supplied to the bloc.

Assessing the situation ahead of the EU Energy Ministers Meeting held in Dublin, EU Commissioner for Energy Dan Jørgensen emphasised that external dependency has reached an unsustainable point.

In his statement on 29 September, Jørgensen said: “The extra amount we paid for energy this year exceeded 100 billion euros, yet in return we did not receive a single drop more oil or a single cubic metre more gas.”

Pointing out that every rise in global prices is directly reflected on European households and industry, Jørgensen argued that the solution lies in domestic resources.

“Instead of imported, polluting, and expensive fossil fuels, we must turn to our own generated energy, to green electricity,” the commissioner said.

Energy prices in Europe surged once again due to the war with Iran, escalating concerns over navigation security in the Strait of Hormuz, and turmoil across global oil markets.

Following a new wave of attacks directed at Iran by the Washington administration, European benchmark natural gas prices in early September reached their highest level since January 2023.

Dutch gas futures rose by 5.9% to €73.95 per megawatt-hour.

This market pricing was driven by concerns ahead of the winter period that liquefied natural gas (LNG) shipments routed through the Strait of Hormuz could face prolonged disruptions.

Another development rattling the continent’s energy balances was the signals emanating from the White House. The possibility raised by US President Donald Trump of curbing diesel exports heightened anxiety in Brussels.

The EU, which meets approximately half of its diesel needs from the US, does not want this supply line severed.

Jørgensen reported that he conveyed clearly to Washington that such a step would serve the interests of neither the US nor Europe.

The EU official described US Energy Secretary Chris Wright’s distance from the export restrictions in question as a positive approach.

Stating that Europe is not currently experiencing a physical supply crisis, Jørgensen noted that they aim to minimise uncertainties as the winter season approaches.

Having turned to alternative suppliers and LNG markets to reduce its reliance on Russian resources since the outbreak of the Russia-Ukraine war, the EU continues to face high cost pressures.