The European Commission is considering a gas price cap and other measures to address surging energy prices triggered by the Iran conflict, while firmly rejecting any return to Russian fossil fuels.

Energy Market Crisis and Proposed EU Measures

European Commission President Ursula von der Leyen stated the EU is exploring subsidising or capping natural gas prices to reduce its impact on electricity costs. This follows a near 70% spike in European gas prices since the start of the Iran conflict, driven by the shutdown of Qatari LNG production and the effective closure of the Strait of Hormuz, a key transit route for global LNG. While affirming the current market design has overall delivered and has support, von der Leyen emphasized the need to mitigate gas-driven electricity costs. Additional options being prepared include better use of Purchase Power Agreements, contracts for difference, and state aid measures.

Rejection of Russian Fossil Fuels and Oil Stock Release

Von der Leyen explicitly dismissed arguments for returning to Russian fossil fuels amid the current energy market upheaval, calling such a move "a strategic blunder." Concurrently, the EU is coordinating with the International Energy Agency (IEA) on oil market interventions. An EU Commission spokesperson confirmed the bloc's emergency oil stocks are full and that it will take necessary measures to release stocks as part of IEA-coordinated efforts. The IEA is set to propose its largest-ever release of oil reserves—reportedly 400 million barrels—to counter soaring crude prices following the Middle East conflict, surpassing its 2022 release after Russia's invasion of Ukraine. The EU's oil and gas supply coordination groups will also meet to discuss a response to the price surge.