The ongoing conflict in Iran is compelling the European Union to reconsider its climate policies and energy strategies due to rising energy prices. Europe, heavily reliant on imported oil and gas, has seen benchmark gas prices surge over 60% since the conflict began, although they remain below the peaks experienced after Russia’s invasion of Ukraine. Despite significant advancements in renewable energy, gas still constitutes about 20% of the EU’s energy consumption, primarily for heating and industry.
Although Europe has reduced its reliance on Russian energy, it has become increasingly dependent on U.S. liquefied natural gas (LNG), which accounted for nearly 60% of imports in 2025. This shift has not eliminated vulnerability to external shocks, especially with Norway’s capacity largely maxed out. The EU faces limited options to mitigate the impact of reduced Middle Eastern supply, including potentially delaying the phase-out of Russian LNG imports or relaxing climate policies designed to curb emissions.
Policymakers are recognizing that some environmental measures are driving up energy costs and harming industrial competitiveness. Germany’s economy minister acknowledged that the EU’s energy transition has resulted in higher systemic costs, suggesting a reevaluation of sustainability versus affordability. As the conflict in Iran continues, Europe may have to make tough choices that could sacrifice significant climate ambitions.
