Iran war a “painful reminder” of the EU’s fossil reliance, analysts warn

The Iran war and ensuing escalation of the conflict in the Middle East have served to be a “painful reminder” of the European Union’s fossil reliance, especially in countries like Italy and Belgium, analysts have warned.

“The rise in fossil prices increased the EU’s fossil import bill, which could have a knock-on effect on electricity prices. Countries that rely less on gas power are more insulated from this risk,” analysts at the consultancy Ember said in new research.

The EU already paid an additional €2.5 billion for fossil fuel imports in the first 10 days of the conflict, it added.

Countries that rely less on gas power are less exposed to electricity price increases, for instance in Spain, gas influenced the price of electricity in only 15% of hours in 2026 so far, compared to 89% in Italy, Ember noted.

Average power prices in Spain remain below the cost of gas-fired power, and lower than other EU countries with large gas power fleets, it added.

Gas-reliant countries in central and western Europe including Germany, the Netherlands, Italy and Belgium will be more affected by electricity price spikes than less gas-reliant countries such as Spain, Portugal, France and the Nordics, the consultancy predicted.

“Once again global conflict has sent gas prices soaring, with potentially dramatic economic consequences for import-dependent regions. Clean power paired with electrification is the only way to shield against sudden gas and power price hikes in this and future crises,” said Dr. Chris Rosslowe‍, a Senior Energy Analyst at Ember.

However some countries have moved faster than others, and there is still plenty of work to do to build a “resilient, clean, electrified energy system across the bloc,” he cautioned.

Conflict escalation

Iranian attacks on Qatar’s Ras Laffan industrial complex, the largest LNG export terminal in the world, knocked out 17 percent of Qatar’s LNG export capacity for three to five years, QatarEnergy’s CEO said on Thursday, further plunging global gas markets into crisis.

The attack came in response to an Israeli bombing of South Pars, the Iranian side of the world’s largest gas field. European gas prices shot up more than 35 percent following the news.

The immediate risk of supply shortages for Europe as a whole is low because direct gas imports from the Middle East are relatively small, Ember said, with around 10% of EU LNG imports being sourced from Qatar, equivalent to roughly 5% of all fossil gas imports.

However, for some European countries, the dependency risk is much higher. Italy and Belgium sourced 36% and 24% of their LNG imports from Qatar in the first half of 2025, respectively, the consultancy noted.

Russia’s invasion of Ukraine caused Europe’s fossil import bill to sky-rocket; and another fossil fuel crisis is now on the cards, Ember warned.

The EU’s total fossil import bill rose from €313 billion in 2021 to €693 billion in 2022, due to the Ukraine war, before falling back to €376 billion in 2024.

In total, inflated prices due to the previous crisis added almost €1 trillion to the EU’s fossil import costs.

(Writing by Sophie Davies)