Latest energy shock reminds Europe of its risky gas reliance

This report by Ember analyzes the impact of a March 2026 escalation of conflict in the Middle East on European energy prices. It highlights how the resulting spike in gas prices increased the EU's fossil import bill and electricity costs, while demonstrating that countries with lower reliance on gas-fired power, such as Spain, are more resilient to such shocks.

• The escalation of conflict in the Middle East, involving strikes by Israel and the US on Iran and attacks on Qatar, led to the closure of the Strait of Hormuz and the Ras Laffan facility. These events caused European gas prices (Dutch TTF) to average €45/MWh between 2 and 6 March, representing a nearly 50% increase from pre-conflict levels of €31/MWh.
• The rise in fossil fuel prices during the first ten days of the conflict resulted in an estimated additional cost of €2.5 billion for EU fossil fuel imports. This follows a previous crisis triggered by Russia's invasion of Ukraine that increased the EU's total fossil import bill from €313 billion in 2021 to €693 billion in 2022.
• The cost of gas-fired electricity generation increased by more than 50% in the ten days following the start of the conflict. This increase is twice as large as the cost of carbon associated with the EU Emissions Trading Scheme (ETS). The carbon cost represents at most 10% of the final EU household electricity bill, which is lower than the average 2024 VAT rate of 18%.
• Exposure to electricity price increases varies by country based on gas reliance. In 2026, gas influenced electricity prices in 89% of hours in Italy, compared to only 15% of hours in Spain. Consequently, power prices in Spain remained lower than in other EU countries with large gas power fleets and below the cost of gas-fired power.

APA

Rosslowe, D. C., & Petrovich, D. B. (2026). Latest energy shock reminds Europe of its risky gas reliance. Ember. https://ember-energy.org/app/uploads/2026/03/Latest-energy-shock-reminds-Europe-of-its-risky-gas-reliance.pdf

Chicago

Rosslowe, Dr Chris, and Dr Beatrice Petrovich. Latest energy shock reminds Europe of its risky gas reliance. Ember, 2026. https://ember-energy.org/app/uploads/2026/03/Latest-energy-shock-reminds-Europe-of-its-risky-gas-reliance.pdf.

Wikipedia

{{cite report |last1=Rosslowe |first1=Dr Chris |last2=Petrovich |first2=Dr Beatrice |title=Latest energy shock reminds Europe of its risky gas reliance |publisher=Ember |date=13 March 2026 |url=https://ember-energy.org/app/uploads/2026/03/Latest-energy-shock-reminds-Europe-of-its-risky-gas-reliance.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rosslowe2026latest, author = {Rosslowe, Dr Chris and Petrovich, Dr Beatrice}, title = {{Latest energy shock reminds Europe of its risky gas reliance}}, institution = {Ember}, year = {2026}, month = mar, url = {https://ember-energy.org/app/uploads/2026/03/Latest-energy-shock-reminds-Europe-of-its-risky-gas-reliance.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }