Europe's energy dependence was severely exposed by the war in Iran, causing global disruptions to LNG shipments. These continued vulnerabilities are contributing to rising inflation and high energy costs within the EU.

Europe’s energy dependence has been sharply exposed by the war in Iran. Although efforts have been made over the past four years to reduce reliance on Russia, disruptions to liquefied natural gas (LNG) shipments through the Strait of Hormuz have highlighted the EU’s continued vulnerability. The impact is already being felt in European households, with inflation rising to 2.5% in March, driven largely by soaring energy costs.