The Iran Conflict and European Energy Security: One Month In

The post-Russia energy architecture was never post-geopolitical. It was just geopolitical in a different direction.

Institute for Central Europe — Mini-Brief | 30 March 2026

On 4 March, five days into the US-Israeli strikes on Iran, ICE published an assessment of the conflict’s energy implications for Europe. The brief identified five risks: commercial paralysis of the Strait of Hormuz through insurance repricing and self-deterrence.

A sustained spike in European gas and oil prices; a dangerous starting position in EU gas storage; macroeconomic damage to the eurozone’s fragile recovery; and a dual supply squeeze on Central Europe from the Druzhba pipeline disruption.

Four weeks later, every one of these has materialised. Several have been exceeded.

 

 

What We Said, What Happened

The Strait of Hormuz has been effectively closed for 29 days. Maritime traffic is down approximately 90 percent (CBS). Roughly 150 vessels have transited since the war began. That is one normal day’s traffic (Al Jazeera).

The Iranian Revolutionary Guard Corps (IRGC) runs what amounts to a checkpoint: ships submit cargo manifests and crew lists, receive a clearance code, and are escorted through under supervision. Lloyd’s List Intelligence reported on 23 March that at least two vessels paid approximately $2 million each for passage. Iranian lawmakers are drafting legislation to make the fees permanent (CNN).

Iran did not close the strait with a navy. It closed it with a drone, an insurance premium, and a registration form.

The March 4 ICE brief projected TTF gas prices sustained above 50–60 EUR/MWh under its baseline scenario. As of 28 March, TTF stands at approximately €54.5/MWh, with the 52-week high at €69.35. March-to-date gains exceed 70 percent, the strongest monthly move since September 2021 (S&P Global).

Goldman Sachs has revised its Q2 forecast upward twice, now projecting €72/MWh in the base case, €89 in an adverse scenario, and above €100 if Hormuz flows remain depressed beyond ten weeks (Euronews).

On oil, the brief cited JPMorgan’s warning that Brent could breach $100. Brent crossed that threshold on 8 March, peaked at $119.50, and closed on 27 March around $105–112. The physical Dubai crude price hit $126. Goldman Sachs estimates a $14–18 per barrel geopolitical risk premium in current futures. The EIA forecasts Brent above $95 for the next two months (EIA STEO).

EU gas storage stood at 28.4 percent as of 24 March (Kyos/AGSI+). The Netherlands is at 6.0 percent, less than a third of last year’s level. Germany sits at 22.3 percent, France at 22.1 percent.

The ECB responded exactly as the brief predicted. On 19 March, the Governing Council held rates unchanged, revised 2026 headline inflation to 2.6 percent from 1.9 percent in December, and cut GDP growth to 0.9 percent (ECB). The OECD followed with a global growth downgrade to 2.9 percent (CNN).

On 11 March, the IEA announced a coordinated release of 400 million barrels from strategic reserves, the largest in its 52-year history (CNBC, Euronews). The 400 million barrels cover roughly 20 days of normal Hormuz flows. KPMG’s Angie Gildea: “There is simply no substitute for restoring access through the Strait of Hormuz” (NPR). Macquarie was blunter: crude will “continue to trade like a meme stock until the solution is peace” (Axios).

 

What We Underestimated

Three developments exceeded the assessment’s scope.

First, Iran’s monetisation of the blockade. The brief described Hormuz closure as a wartime measure. What has emerged is something different — a selective-access regime that sorts the world’s shipping into friendly and hostile categories, extracts payment for passage, and is being legislated into permanence.

China, Russia, India, Pakistan, and Malaysia have been granted transit. Western-linked vessels are excluded. US Secretary of State Marco Rubio called the tolling “illegal, unacceptable, dangerous” (CNN). Tehran has added a new ceasefire demand: recognition of Iranian sovereignty over the strait (NPR).

If this hardens into a negotiating position, the strait ceases to be an open international waterway and becomes a contested sovereign asset.

Second, the speed of Gulf-wide infrastructure targeting. Bahrain’s Bapco refinery was struck. A fuel storage tank at Oman’s Duqm port was damaged. Kuwait International Airport was hit on 25 March, closing all commercial traffic. QatarEnergy reported “extensive damage” at Ras Laffan (Newland Chase). Qatar’s energy minister said normal LNG deliveries would take “weeks to months” to resume (S&P Global). That was before the latest damage reports.

Third, cascading effects beyond energy. The UN negotiated a humanitarian corridor through Hormuz on 27 March to address fertiliser supply disruption during the spring planting season. RWE warned of delays to North Sea offshore wind projects because components manufactured in UAE fabrication yards are trapped behind the blockade. The green transition and the hydrocarbon crisis share supply chains.

 

The Real Crisis and the Manufactured One

There are two energy crises in Europe right now. One is real. The other is politically useful.

The real crisis originates in the Strait of Hormuz. Europe diversified away from Russian pipeline gas after 2022 and moved toward LNG. Qatar, the United States, Australia. That diversification worked. But it shifted Europe’s exposure from a supplier risk to a transit risk.

Qatar’s force majeure removed roughly one-fifth of global LNG export capacity. Asian buyers are now competing for Atlantic basin cargoes that would otherwise flow to Europe. The 2022 dynamic returns: fewer molecules, more bidders, spiralling prices. And Europe enters this competition with storage at its lowest seasonal level in years.

The second crisis — the Druzhba pipeline dispute — is not an energy emergency. It is a political instrument.

Though Slovakia and Hungary would gladly use Russian oil delivered by pipeline, the European Commission’s Oil Coordination Group confirmed on 26 February that there is “no immediate risk” to the EU’s security of supply (European Commission DG Energy). Both Hungary and Slovakia have begun releasing strategic reserves.

Non-Russian crude is flowing via Croatia’s Adria pipeline (JANAF), which has sufficient annual capacity to cover both countries’ needs (Euronews). MOL Group confirmed seaborne crude shipments began arriving at Omišalj in early March (MOL Group).

Slovakia released 250,000 tonnes from state reserves to the Slovnaft refinery against a bank guarantee, at the oil’s recorded book value, well below current market prices. Hungary released reserves equivalent to three months of domestic consumption. Slovakia’s emergency stocks have since dropped below the IEA-mandated 90-day minimum.

Both governments are drawing down stockpiles meant for genuine emergencies to cushion MOL’s refineries from the full cost of rerouting supplies.

The real issue is price, not supply. Adria transit fees are reportedly three to five times higher than Druzhba’s, according to a joint Hungarian-Slovak submission to the EU Council. MOL filed a complaint with DG Competition, accusing JANAF of abusing its dominant position.

Slovnaft’s refinery is configured for Russian Urals-grade crude, and alternative blends require processing adjustments. MOL is making the transition. The refinery expects full loading from April. But the technical friction is being used as a political stalling tactic, not reported as an engineering timeline.

Switching supply routes is neither free nor instant. But it is feasible, it is happening, and it does not justify blocking sanctions on the country that bombed the pipeline. Croatia’s economy minister: “No EU country has any technical justification to stay tied to Russian oil.”

Yet Fico and Orbán have parlayed this price differential into a series of vetoes and retaliatory measures. They blocked the EU’s 20th Russia sanctions package and the €90 billion Ukraine aid loan. Slovakia suspended emergency electricity exports to Ukraine during winter, at a time when Ukraine’s grid was under sustained Russian bombardment.

Orbán threatened on 25 March to suspend gas supplies to Ukraine until Druzhba oil resumes. Slovak police have opened a high-treason investigation into Fico over the emergency electricity cut-off, following what has been described as the largest criminal complaint in Slovak history (Kyiv Independent).

Druzhba is not the problem right now. It serves as an excuse. The pipeline dispute gives Budapest and Bratislava a grievance framework to block sanctions enforcement and obstruct Ukraine aid disbursement. Whether by design or by incentive, the effect is the same.

If this were only a Budapest-Bratislava problem, the EU could manage it. It is not. Belgian Prime Minister Bart De Wever told francophone media in mid-March that the EU should “normalise relations with Russia” and “regain access to cheap energy.” EU Energy Commissioner Dan Jorgensen rebuked this directly: the EU will “not import one molecule” of Russian energy in future (Belga News Agency).

But De Wever said out loud what seven EU governments have been doing quietly. According to a Reuters analysis of CREA data, France increased the value of its Russian energy imports by 40 percent in 2025. The Netherlands by 72 percent. Belgium, Croatia, Romania, Portugal, and Hungary all raised their imports. In January 2026, 23 of 25 Yamal LNG cargoes went to European ports (Kyiv Independent). The EU postponed its planned 15 April proposal for a permanent Russian oil ban (Euronews).

The Iran crisis did not cause this fracture. It made it harder to deny.

 

What Comes Next

The brief’s original scenario of a short conflict with Hormuz reopening within two to three weeks is expired.

A negotiated partial reopening remains the most likely near-term outcome. Trump has extended his deadline for Iran to reopen Hormuz to 6 April. A 15-point US ceasefire proposal has been transmitted via Pakistan (NPR). If something like this holds, Hormuz traffic might recover to 30 or 40 percent of pre-war levels. TTF would settle in the 45–55 EUR/MWh range. Brent would drift toward $85–95.

A prolonged standoff with selective access is equally plausible. Iran formalises the toll regime. Western shipping remains excluded. Goldman Sachs projects a summer TTF average above €89/MWh in this case. SEB analyst Ole Hvalbye told Montel News that prices could reach €115–155/MWh under a three-month disruption. The November 90-percent storage target becomes unreachable.

Escalation to sustained Gulf-wide infrastructure targeting remains a tail risk, but the tail is getting fatter. The US has struck military facilities on Iran’s Kharg Island, which handles 90 percent of Iranian crude exports. Oil-trade sites were spared, but Trump has warned they could be next. If QatarEnergy’s infrastructure damage proves long-term, a temporary disruption becomes a structural deficit.

 

The Argument That Writes Itself

On 4 March, this brief closed with a sentence: “This crisis is the strongest argument yet for accelerating clean-energy deployment as a hard security imperative.”

One month of evidence has made that sentence harder to argue with and easier to ignore. Europe replaced a supplier dependency with a transit dependency and discovered that every barrel transits somewhere, and every transit route is someone’s leverage.

The Hormuz closure demonstrated that asymmetric tools can achieve what carrier groups cannot: cheap drones, insurance repricing, commercial self-deterrence. The Druzhba dispute demonstrated that even a manufactured crisis can fracture EU solidarity if member states lack the political will to use available alternatives.

No diversification within hydrocarbons eliminates geopolitical exposure. It only shifts its geography.