BRUSSELS — The EU’s 27 member countries are set to back a push to send more naval ships to the Middle East as conflict paralyzes shipping routes, but will insist on them operating strictly within the parameters of missions that predate the war in Iran. Presidents and prime ministers from across the bloc will meet in Brussels Thursday to discuss their response to the Iran crisis. In a draft statement being negotiated by ambassadors in advance of the talks — seen by POLITICO — the leaders show support for an increased naval presence in the region. “The European Council highlights the role of the EU maritime defensive operations EUNAVFOR ASPIDES and EUNAVFOR ATALANTA, and calls for their reinforcement with more assets,” reads the latest version of the text, dated March 17. However, the text introduces new language demanding that the vessels take part in the missions only “in line with their respective mandates.” The EU-led Aspides is confined to the Red Sea and the Gulf of Aden, and was launched in 2024 in response to Houthi militant attacks on naval traffic travelling to and from Europe via the Suez Canal. Atalanta, meanwhile, patrols the east coast of Africa and the Indian Ocean to combat piracy. The Trump administration has urged European allies to send frigates to escort naval traffic through the Strait of Hormuz. Energy prices have skyrocketed as a result of tankers being unable to cross the narrow waterway, which links oil- and gas-rich exporters like Saudi Arabia and Qatar to the global market. “I wonder what would happen if we ‘finished off’ what’s left of the Iranian Terror State, and let the Countries that use it, we don’t, be responsible for the so called ‘Strait?’ That would get some of our non-responsive ‘Allies’ in gear, and fast!!!,” U.S. President Donald Trump wrote on Truth Social on Wednesday. Ahead of the EU summit, a group of countries — Italy, Spain, Greece, Malta and Cyprus — have written to the bloc’s leadership warning of another potential maritime crisis caused by the Russian liquefied natural gas carrier Arctic Metagaz, which has been adrift in the Mediterranean since March 3. “The precarious condition of the vessel, combined with the nature of its specialised cargo, gives rise to an imminent and serious risk of a major ecological disaster in the heart of the Union’s maritime space,” the leaders of the coastal nations warned. “In this context, we look to the European Commission to facilitate the mobilisation and coordination of Member States and existing EU-level mechanisms, with the goal of ensuring their more efficient, better coordinated and faster response.”

BRUSSELS — Anxiety is growing over Europe’s unusually low gas storage levels as the war in Iran threatens to spark a fight among countries over dwindling global energy supply. The EU requires member countries to maintain gas reserves at 90 percent of capacity by the winter — a measure brought in after Russia’s 2022 invasion of Ukraine. But this year’s colder-than-average winter depleted those reserves to under 30 percent as of March, the lowest since 2022. With gas prices soaring after Iranian attacks effectively closed the Strait of Hormuz — the narrow passage through which 20 percent of the world’s liquefied natural gas passes, of which 6 percent was bound for Europe —  the task of refilling those reserves by the winter carries a greater risk. Behind the scenes, government officials and industry lobbyists warn countries could rush to meet those targets all at once if the rules aren’t loosened, driving up demand and allowing traders to exploit soaring prices. That’s the dynamic that caused traders to bid up gas prices to over €300 per megawatt hour in 2022, with the lofty new storage targets compounding the sharp rise in demand that followed Russia’s supply cuts. Analysts say the difficulty in restocking those reserves will also be made more difficult by stiff competition from Asia, which is more directly exposed than Europe to the gas shipments that once flowed through the Persian Gulf. That could lead to higher mid-year gas prices, undercutting the incentive for traders to sell in the winter and store in the spring and summer. Officials stress it’s still early days. But already, multiple European governments have considered invoking existing carve-outs that allow them to relax storage targets in order to reduce the scope for bulk buying, according to three European energy officials familiar with the matter. Meanwhile, at least three countries believe the EU executive should introduce flexibilities beyond the existing framework, including lowering the target by as much as 30 percent, two of the officials said. The countries also sought a new EU mechanism to coordinate gas purchases, they added. Such policies would allow countries to fill up for the coming winter more comfortably. “With a lower target we would not be driving the demand for very high storage level filling, [and] driving the prices up,” said one of the people. The Commission hasn’t yet ruled on how best to respond, the people said. But it too has explicitly flagged the issue, both at a summit of energy ministers on Monday and previous gatherings of ambassadors and national energy experts over the past week, according to the people cited above and an EU official. A Commission spokesperson didn’t respond to a request for comment. In public, officials remain sanguine. For instance, Germany’s reserves are running at 22 percent capacity after Berlin pushed to lower its storage goals last year, but the country’s economy minister, Katherina Reiche, has downplayed the issue. Others are more nervous. “The status quo is unsustainable — existing mechanisms do not sufficiently ensure the security of gas supply because the incentives to fill gas storage facilities are inadequate,” Sebastian Heinermann, the managing director of German storage association INES, said in a statement Tuesday. Gas industry lobby group Eurogas has also warned that tough EU regulations governing cargoes of liquefied natural gas — which can be shipped to the highest bidder, as opposed to fixed supplies of pipeline gas — makes selling to Europe less appealing to many exporters. That further squeezes the EU’s chances of securing desperately needed fuel on an ever-tightening market.

OSLO — Norway is doubling down on its role as Europe’s energy lifeline as wars and geopolitical turmoil rattle global markets. Norwegian Prime Minister Jonas Gahr Støre said the widening conflict in the Middle East, which has already pushed oil prices higher and reduced supply, underscores why Europe needs stable energy partners. “It’s a war that appears to have no plan,” Støre said at the Offshore Norge Annual Conference in Oslo on Thursday, referring to the U.S. and Israeli attacks on Iran. “In such unpredictable times, Norway needs to be reliable.” Since Moscow’s full-scale invasion of Ukraine, Norway has become Europe’s largest pipeline gas supplier, replacing much of the fuel that once flowed from Russia. “All the gas we produce in Norway goes to Europe, and around 90 to 95 percent of oil we produce goes to Europe,” Anders Opedal, chief executive of Norwegian oil and gas company Equinor, told POLITICO. But while Oslo is positioning itself as a pillar of Europe’s energy security, Norwegian officials say the country cannot quickly ramp up production even if geopolitical tensions tighten global supply. Norway’s Energy Minister Terje Aasland said his country is already operating close to maximum output. “We are at the top of production capacity just now,” he told POLITICO. Increasing supply would require new exploration and investment, Aasland said, as his government works to slow an expected decline in production after 2030 by developing additional resources on the Norwegian continental shelf. “Our focus is to be a stable and long and predictable supplier of energy to the European market,” he said. ARCTIC TENSIONS At the same time, Norway is pushing back against calls in Brussels to halt oil and gas development in the Arctic as the EU revises its Arctic strategy. The EU’s current policy commits the bloc to pursuing an international moratorium on Arctic oil and gas extraction, but the strategy is now under review, with a public consultation closing March 16 and a revised version expected before the summer. Norwegian officials, industry groups and unions are lobbying Brussels to drop the idea, arguing Europe will continue to need Norwegian Arctic gas as it phases out Russian supplies. Aasland defended Norway’s record in the region, pointing to the Barents Sea — where the country launched the Johan Castberg oil field last August — as an example of responsible development. “We have delivered oil and gas to the European market from the Arctic for several decades,” he said. “And we will develop it.” Industry leaders say Arctic production already plays a role in replacing Russian supplies. “When we opened the Johan Castberg field last year, the first cargo went straight to Europe, replacing Russian oil,” Opedal said. “Any moratorium here would actually reduce Europe’s security of supply.” Norway supplies roughly a third of EU gas imports, though Arctic gas accounts for a much smaller share, around 3 percent of the bloc’s imports. Still, Norwegian leaders argue a moratorium would send the wrong signal while Europe remains dependent on external energy supplies. Norwegian officials, industry groups and unions are lobbying Brussels to drop the idea, arguing Europe will continue to need Norwegian Arctic gas as it phases out Russian supplies. | Soeren Stache/picture alliance via Getty Images Ine Eriksen Søreide, the leader of Norway’s Conservative party, said calls to stop Arctic development clash with Europe’s current energy security priorities. “It sends a very bad signal when the Commission says we need to stop oil and gas development in the Arctic, because that’s development the EU relies on,” she said. Experts say the broader Arctic energy picture is dominated by Russia, which has major plans to expand liquefied natural gas production through projects such as Yamal LNG and Arctic LNG 2. Malte Humpert, founder and senior fellow at the Arctic Institute, said climate change is rapidly transforming the once-inaccessible region. “If we didn’t have climate change, we wouldn’t be talking about Arctic geopolitics,” he told POLITICO. “Climate change is actively reshaping the map, where suddenly there’s new trade routes available that didn’t exist even 10, 15 years ago.” OIL AND GAS AREN’T GOING ANYWHERE FOR NOW Across Oslo’s political spectrum, the message is broadly the same: Europe still needs reliable fossil fuel suppliers, and Norway intends to remain one of them. Opposition leader Sylvi Listhaug of the right-wing Progress Party argued Europe should encourage Norway to produce more oil and gas to reduce reliance on authoritarian regimes. “The more Norway can produce of gas, the less dependent Europe will be” on non-democratic producers, she said. Ine Eriksen Søreide, the leader of Norway’s Conservative party, said calls to stop Arctic development clash with Europe’s current energy security priorities. | Pool photo by Olivier Doulier/AFP via Getty Images Listhaug also warned that high energy prices risk undermining European competitiveness. “Energy and economic growth are a one-to-one relationship,” she said. Even as Norway expands renewables, leaders insist fossil fuels will remain crucial to Europe’s energy system during the long transition to cleaner alternatives. “We have to have two thoughts in our heads at the same time,” Aasland said.

President Donald Trump’s military campaign against Iran has Washington’s Asian allies scrambling to address an energy crisis that could destabilize many of their economies within weeks. And so far their appeals for guidance or assistance from the Trump administration are going unheeded. Asian countries are some of the most exposed to the energy crisis sparked by the Iran war because they rely heavily on oil and liquefied natural gas that passes through the Strait of Hormuz, which has effectively ground to a halt since the first U.S.-Israeli strikes on Iran two weeks ago. In that time, Japan, Thailand, Vietnam, South Korea and others have struggled to decode Trump’s yo-yoing statements about the goals of the operation and when it will end, according to three Asian officials and one former U.S. official who were granted anonymity to discuss the tensions. “We’re not receiving any communication from the Trump administration,” said one of the people, a Washington-based Asia diplomat. Asked what the Trump administration could do, the person said, “Ideally, just end the conflict.” Another one of the officials from an Asian country pointed out that there are actions short of that that the U.S. could take to ease the pressure on energy markets, such as enlisting other countries to participate in its effort to guarantee insurance for tankers transiting the Strait of Hormuz. The Trump administration has given no indication that it plans to take such actions. The International Energy Agency said Wednesday its member countries would release 400 million barrels of oil from their emergency stocks in the largest such reserves distribution in its history, but it’s unclear how much this will ease the pressure on Asian countries. Many Asian economies lack large domestic reserves and are thus particularly exposed to price spikes and supply disruptions. “Our oil reserves are enough for about one month of domestic consumption,” the Washington-based Asian diplomat said. President Donald Trump said Wednesday that Washington’s attacks on Iran’s navy should assuage concerns about the safety of ships transiting the Strait, but that does not to appear to have done much to ease jitters. The second Asian official said some of Trump’s comments suggesting he is digging in for a long conflict are ratcheting up concern. His country’s alarm level will be dictated, “by how long this goes on,” the official said. Trump said Wednesday that the U.S. has hit a significant number of Iranian military targets and suggested the war could be over quickly. He has also said it could take four to six weeks, but has also called for Iran’s “unconditional surrender,” which could take much longer. Countries across the Indo-Pacific are taking measures to limit the impact of a looming cut in oil and gas from the Persian Gulf if supplies don’t resume in the next two weeks. The Philippines and Vietnam have revived Covid-era work-from-home directives to ease consumer demand for gasoline. India has imposed a 20 percent cut in LNG supply to the country’s industrial sector, New Delhi announced Wednesday. The Japanese government announced Wednesday it will release some of its strategic petroleum reserves to compensate for a shortfall in imports. The U.S. could see long term effects of leaving its Asian allies to fend on their own. “Foreign embassies need and expect information that explains what the U.S. is doing, reassurance that this is a short-term problem and what our plan is to help,” said Scot Marciel, former principal deputy assistant secretary for the State Department’s Bureau of East Asian and Pacific Affairs during the Obama administration. “Not doing that just adds to a pretty strong sense in the region that the administration is not really making a lot of effort to be a good partner.” The White House said allies will ultimately benefit from what is a temporary disruption. “President Trump has been clear that these are short-term disruptions,” White House spokesperson Taylor Rogers said. “President Trump is in close contact with our partners around the world, and the terrorist Iranian regime’s attacks on its neighbors prove how imperative it was that President Trump eliminate this threat to our country and our allies.” The Trump administration has limited options to cushion the impact of the supply interruption on the economies of allies and partners in the Indo-Pacific. An oil commodity trader at a major U.S. investment bank said America’s LNG production is already running at maximum and there is no emergency flex capacity that American producers can bring to bear to supply Asia. “There is no short term, immediate thing that the U.S. can do for Asia — there is no pipeline or trucking that can get more gas from here to there,” said the trader, who was granted anonymity because they were not authorized to speak publicly about the issue. Last week the Trump administration said it would temporarily allow India to accept Russian oil. India, a larger refiner, also supplies petroleum products like gasoline and diesel fuel to other Asian countries. Asian countries are competing with each other as they try to pivot to other sources of oil and gas. The jockeying is hitting the wall of recent restrictions on output by regional refineries due to the lack of crude oil coming from the Persian Gulf. China could potentially wrangle a short-term easing in supply constraints in Asia if it taps its close ties with Tehran to ensure that China-bound cargoes pass through the Strait of Hormuz unmolested by Iranian forces. Those shipments may already be happening, according to CNBC reporting Tuesday. Trump has spent the past week attempting to cool nerves in the global energy market, as the price of oil has spiked by more than 29 percent since the U.S. and Israel first launched attacks on Iran. “I think you’re going to see great safety. We have decimated that country. They’re paying a big price now,” Trump said Wednesday, responding to a question about whether oil companies should transit the Strait. But Iran has continued to hit ships in the vital waterway. On Wednesday “unknown projectiles” hit and sparked a fire on a Thai cargo vessel in the Strait while two other ships were hit in the nearby Persian Gulf, the New York Times reported. The leaders of G7 countries — which includes Japan — agreed in a call on Wednesday to prepare for future freedom of navigation operations though such efforts are not possible now “as it remains an active theater of war,” according to a French account of the discussion. While the U.S. has been concerned that Iran has begun to lay mines in the Strait of Hormuz, Trump said Wednesday the U.S. believes Iran hasn’t yet done so. He said the U.S. has hit 28 mine-laying ships. Japan’s Prime Minister Sanae Takaichi will have the chance to raise her concerns and others on the continent when she arrives in Washington next week for a summit with Trump that was planned before the war broke out but has taken on new meaning amid the turmoil. “The president made a decision on Iran without consulting allies, and they’re bearing the brunt of it. So the president obviously needs to appreciate the cost that Japan will bear” when he meets with Takaichi next week, Rahm Emanuel, former U.S. ambassador to Japan, said.

LONDON — Keir Starmer knows the war in Iran could sink his number one domestic mission: Cutting the cost of living.  But unfortunately for him, the man with most power to stop the conflict seems not to be in a hurry.  The U.K. prime minister was more explicit than ever on Wednesday that he wants to see “de-escalation” in the Middle East — in part because it’s the surest way of stopping energy bills skyrocketing in his own country.  Starmer said his government was “working around the clock” to ensure consumer and business costs don’t soar, after being challenged in the House of Commons over fears that disrupted oil and gas flows from the Gulf are spiking gasoline prices and could hike home energy bills, too. “The most important thing, the most effective thing we can do,” he told MPs, “is to work with our allies to find a way to de-escalate the situation” in the Middle East.  That might prove … tricky.  While Donald Trump faces his own domestic drama over high prices at the pump, the White House is showing no signs of seeking an immediate resolution to the conflict.   The Trump administration believes it can withstand a spike in oil prices for as many as four weeks before the political pain starts to bite, POLITICO has reported. That timeframe — should it be borne out — is laden with risk of further escalation in the region, and carries major domestic political risk for Starmer, over an issue that remains the public’s number one priority.  BALANCING ACT “While the public are deeply concerned about events in the Middle East and implications for international security, those concerns are dwarfed by worries about the cost of living,” said pollster Luke Tryl, director of the More in Common think tank.  “The prime minister has so far managed to stay on the right side of public opinion on the war, with the median Brit supporting Starmer’s position of allowing the use of U.K. bases purely for defensive strikes,” Tryl added. “However, the balancing act between maintaining a good relationship with the United States and being able to show he is doing everything he can to stop the war leading to another spike in the cost of living is a tricky one.”  The Trump administration believes it can withstand a spike in oil prices for as many as four weeks before the political pain starts to bite, POLITICO has reported. | Celal Gunes/Anadolu via Getty Images There’s also a Catch-22. Efforts by Starmer and other European leaders to mitigate the war’s impact on the global economy might help persuade Trump he need not hurry U.S. withdrawal from the Gulf.  America’s allies confirmed Wednesday they would coordinate — via the International Energy Agency (IEA)— release of a record 400 million barrels of oil from their strategic reserves. Even before it was confirmed, expectation of this move helped temper oil price rises.   The next big decision could center on the Strait of Hormuz, a key trade route largely closed to oil and gas shipping since the crisis began.  While welcoming agreement on the release of strategic reserves, IEA Executive Director Fatih Birol said: “The most important thing for a return to stable flows of oil and gas is the resumption of transit” through the Strait.  Starmer’s Chancellor Rachel Reeves told MPs on Wednesday the “root cause” of the U.K.’s cost-of-living concerns “is the challenge in getting oil and gas out of the Middle East.” The government would “work flat-out” to de-escalate the conflict and “get vessels moving again in the Strait of Hormuz,” she said.  Precisely what that means in practice — or whether the U.K. or other American allies could police Hormuz without getting involved in U.S. and Israeli offensive operations against Iran — is unclear.  Foreign Secretary Yvette Cooper spoke to U.S. Secretary of State Marco Rubio Monday, according to U.K. officials, who said they discussed their “desire to see a swift resolution that supports stability in the Middle East and protects the global economy.”  MOMENT OF MAXIMUM DANGER So far, U.K. household energy bills — significantly influenced by wholesale gas prices — have been spared the price spike, which has been driven by both the effective closure of the Strait and by Iranian attacks on energy production in Gulf countries. The most notable attack was against QatarEnergy, a major liquefied natural gas exporter, which has suspended production. U.K. gas and electricity costs are determined using a regulated price updated every three months, and prices until June are already locked in.  But the longer the war goes on, the bigger the impact will be when the price cap is set for July to September — and beyond.  Reeves told MPs on Wednesday it is “much too early, less than two weeks into the conflict, to have any certainty about what things will look like when the next energy price cap is determined, at the end of May, for July.”  But for a government that has promised to cut energy bills £300 by 2030, the longer the war, the bleaker that moment in May could be.  Foreign Secretary Yvette Cooper spoke to U.S. Secretary of State Marco Rubio Monday, according to U.K. officials, who said they discussed their “desire to see a swift resolution that supports stability in the Middle East and protects the global economy.” | Justin Tallis/AFP via Getty images Hence Starmer’s increasingly urgent focus on somehow persuading the U.S. and Israel to draw back. That task won’t be made any easier by deteriorating relations with Trump, who last week, in a row over U.S. access to U.K. military bases, dismissed Starmer as “not Winston Churchill.”  “The most important issue is de-escalating the situation,” Starmer told MPs Wednesday, reiterating that the U.K. “should not join the war in Iran” and would only carry out defensive military operations in the region to “protect British lives and the British national interest.”  For the prime minister — hanging onto office by a thread even before the conflict — it could yet prove be existential.  “For all the support for Starmer in navigating the conflict so far,” said Tryl, “if people start to feel the impact in their pockets and bills, the demand for change which has already tanked his poll ratings will likely only grow.”  Additional reporting by Esther Webber.

LONDON  —  It’s all starting to feel very 2022.  That year lives in infamy for Europe’s leaders, who remember its security implications after Russia’s full-scale invasion of Ukraine but also — just as painfully — the energy supply and price shock that followed.   Prices spiked, supply fears stalked the continent, and governments were forced to spend hundreds of billions of euros on bailouts for households and industry.  Now, with oil and gas prices surging once again — because of another war beyond Europe’s control — leaders are scrambling to find a response. The price of a barrel of oil broke the $100 mark on Monday as the war in the Middle East — sparked by U.S. and Israeli strikes on Iran — entered its second week, with no clear end in sight.   G7 finance ministers held an urgent meeting later in the day and said they “stand ready” to “take necessary measures,” including a drawdown on emergency oil reserves. But they stopped well short of committing to act. French Finance Minister Roland Lescure, who chaired the meeting, said G7 ministers had not yet agreed to make that move. While the politicians talked, the Strait of Hormuz, a vital energy artery through which 20 percent of the world’s oil is transported, remains effectively closed by Tehran’s threats to shipping. Oil and gas production at sites in several Gulf countries has slowed down or ceased, with Iranian drones and missiles targeting energy infrastructure.     And it’s hitting home. Across Europe, prices at the pump are already rising. The price of natural gas — the main driver of the 2022 crisis — is also surging, rising above €60 per megawatt hour on Monday. That isn’t yet near the dizzying heights of 2022, but higher than at any time since.  “We are now seeing a regional conflict with unintended consequences,” warned European Commission President Ursula von der Leyen on Monday, in a speech to EU ambassadors, citing the effects on energy, trade and finance. “And the spillover is already a reality today.”  LONGER THE WAR, DEEPER THE PAIN   European leaders have started to acknowledge that reality. European Economy Commissioner Valdis Dombrovskis told reporters: “In a more benign scenario where the conflict is contained in a couple of weeks, one can expect that it would not have major effects on the global and European economy.” But a “more protracted” crisis, he said, “may end up with [a] substantial stagflationary shock on the global and European economy,” with higher energy prices then spreading to broader inflation. Speaking at a military base in Cyprus, French President Emmanuel Macron said restoring shipping in the Strait of Hormuz would be “essential for the flow of gas and oil.” To achieve that, he said France wanted to establish military escorts for container ships and tankers “as soon as possible.” But such operations can’t get underway until the fighting in the Middle East subsides, he cautioned.   G7 energy ministers will gather for an urgent meeting this afternoon in Paris, two European officials and one U.K. official confirmed. The most important question for leaders is one that no one — except perhaps Donald Trump — can answer. How long will this war last?   So far, steep oil and gas price rises have been tempered, energy analysts said, by a global oversupply of oil and an expected surge in global liquefied natural gas (LNG) production over the next few years.    Increases in gas price also take time to bleed into consumer bills, giving policymakers some time to respond.    European energy ministers are set to meet next week, with the rise in energy prices — and options for taming them — top of the agenda.    One worry, an official from a national energy ministry told POLITICO, is that EU gas reserves have been depleted to unusually low levels after this year’s cold winter. There is no guarantee traders can be nudged to refill them over the summer, they said — while insisting there is “no immediate concern.” In theory, the EU can deploy stockpiles, arrange joint emergency purchases and impose price caps under emergency powers. But countries haven’t yet called for these measures, preferring to wait and see how prices and supply are affected, according to an EU official. But for oil in particular, there are already fears things will get worse before they get better — and the longer the war goes, the steeper prices will rise.   “We are seeing large scale shut-ins in many middle Eastern countries including, shockingly, Saudi Arabia now,” said Ajay Parmar, oil specialist and director at energy market intelligence firm ICIS. “The consequences for the market will be far more significant than that seen in 2022.”   ‘ONLY FOOLS’  Trump — despite fears in his own administration about the political fallout of a soaring oil price — is telling the world to suck it up.    “Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A. and World, Safety and Peace,” he said on Truth Social. “ONLY FOOLS WOULD THINK DIFFERENTLY.” Trump would claim later on Monday the war was “pretty much” complete — leading the price of oil to tumble back well below $100. For European leaders fretting about the cost of living and voter backlash, eyeing the volatility of the markets, it won’t be all that reassuring. None of them, so far, have dared place the blame for the crisis at Trump’s door. The U.K.’s Energy Secretary Ed Miliband — despite being at odds with Trump on almost all matters of energy policy — was careful to tell MPs last week that upheaval on energy markets were a result of “Iranian threats to the Strait of Hormuz” — not the U.S and Israeli military action that preceded them.   But one of his predecessors, Ed Davey, who was U.K. energy secretary until 2015 and is now leader of the centrist U.K. Liberal Democrat party, gave a hint of where the political debate about the war and its consequences may yet go in Europe.     “This reckless and illegal war will result in people paying higher prices at the pump and their energy bills will go up,” he told the BBC on Monday. Davey added: “And people when they come to pay them will say: ‘Well, who caused this?’ It will be Donald Trump.” 

PARIS — The rising price of oil is undermining the European Union’s efforts to rein in Vladimir Putin’s shadow fleet of sanctioned oil tankers. Russian oil is in high demand as the war in the Middle East and tensions around the Strait of Hormuz tighten global supply, sending benchmark crude prices above $100 per barrel on Monday. That risks weakening a central plank of the EU’s efforts to cut off funding for the Russian president’s war in Ukraine: making it harder and more expensive for Moscow to export oil through a network of aging vessels operating outside the Western shipping system. EU countries have already sanctioned hundreds of tankers and are working on new measures aimed at the insurance, crewing and other maritime services that allow those ships to operate — tools Brussels hopes will make the shadow fleet increasingly costly and difficult to run. But a tighter oil market means buyers may still be willing to purchase discounted Russian crude. As prices rise, the financial incentive to secure cheaper Russian barrels grows, offsetting the higher risks and costs associated with sanctioned ships. The demand is expected to be driven by Asian countries like China and India — the world’s first and third-largest importers of oil — which rely heavily on Middle Eastern supplies and are likely to turn to Russia to make up for any shortfalls. Indian refiners have already reportedly moved to buy more Russian crude after the U.S. temporarily eased pressure on the South Asian country by allowing purchases to resume last week. India imports, on average, 10 million metric ton of crude oil per month through the Strait of Hormuz, said Vaibhav Raghunandan, an EU-Russia analyst at the Centre for Research on Energy and Clean Air. “Even if half of this volume is replaced with Russian volumes at sea, it will translate to huge profits for the Kremlin.” The shift comes after millions of barrels of oil were stranded at sea last week as escalating tensions blocked the Strait of Hormuz, a maritime choke point through which a fifth of the world’s oil and liquefied natural gas flows. Meanwhile, around €1.3 billion of Russian crude is currently at sea looking for buyers, Raghunandan estimates. SANCTIONS STALL The market squeeze also comes at a difficult moment for Brussels. The EU is trying to push through a new sanctions package aimed at tightening restrictions on Russia’s shadow fleet — including limits on maritime services — but the proposal is currently stalled after Hungary vetoed the plan. The shadow fleet includes hundreds of aging tankers used to transport Russian crude outside Western oversight. Last month, President Donald Trump announced a trade deal with Indian Prime Minister Narendra Modi that included a commitment from New Delhi to halt purchases of Russian oil in exchange for reduced trade barriers with the United States. | Andrew Harnik/Getty Images EU foreign policy chief Kaja Kallas warned last week that rising oil prices risk boosting Moscow’s war effort. “When the oil price goes up, it actually benefits Russia to fund its war,” she said, making the case for the maritime services ban at a virtual meeting of EU foreign ministers. Malte Humpert, founder and senior fellow at The Arctic Institute, said a prolonged Iran–U.S. conflict would likely benefit Moscow by pushing energy prices higher. “Rising prices for sure,” he said, noting that Russian oil and gas revenues have been declining in recent months.  “The question is how long the Hormuz situation is going to last,” he added. “If this is over in a week, the effects are probably negligible. If this continues for a few weeks … especially as we’re getting into the summer months, that’s when exports really pick up again from the Russian side.” Humpert argued that supply disruptions “always favor the seller who can deliver on time, reliably and discounted.” India has been a key buyer of Russian crude since the start of the war in Ukraine, though purchases had recently declined under pressure from Washington. Last month, President Donald Trump announced a trade deal with Indian Prime Minister Narendra Modi that included a commitment from New Delhi to halt purchases of Russian oil in exchange for reduced trade barriers with the United States. Before that, Indian ports had become a major destination for tankers carrying Russian crude that were shut out of Western markets by sanctions. Last September, the Boracay, a ship under EU sanctions carrying approximately $100 million in Russian oil, was boarded by the French navy, which found two Russian crew members presented by her captain as “security agents” on board.  Upon the ship’s release, it went on to the port of Vadinar in western India, home to an offshore oil terminal that supplies local refineries, maritime traffic data shows. Elena Giordano contributed reporting to this article.

BRUSSELS — President Donald Trump’s threat to impose a trade embargo on Spain has delivered yet another jolt to the European Union, forcing European leaders to rally around Madrid. Trump launched his broadside on Tuesday after Madrid declined to allow U.S. warplanes to use its air bases to attack Iran. Prime Minister Pedro Sánchez stood firm on Wednesday, describing the five-day-old war launched by the U.S. and Israel on Iran as illegal. French President Emmanuel Macron rushed to Sánchez’s side, expressing solidarity against “recent threats of economic coercion” made against Spain. European Council President António Costa doubled down and stressed that “the EU will always ensure that the interests of its Member States are fully protected.” Trump’s latest showdown with an EU country comes weeks after he vowed to annex Greenland — a self-governing Danish territory. That bust-up tested the transatlantic relationship to the limit, and led European lawmakers to hit the brakes on implementing the bilateral trade deal struck last summer at Trump’s golf resort in Scotland. German Chancellor Friedrich Merz — who was present in the Oval Office as Trump launched his tirade — said: “There is no way that Spain will be treated particularly badly” on trade as a member of the EU, and insisted that he wanted to avoid correcting Trump in public.  He was more forthright in comments later to the German press. “Here in Washington, they know that we on the European side have reached a limit in terms of what we are willing to accept,” Merz said. “I have gained the impression that the president and his staff see it that way too.” STEADY HAND During the Greenland standoff, the EU avoided rushing into a forceful response, patting itself on the back for remaining united as it succeeded in defusing the crisis.  Now, the bloc is dealing with a Trump riled up by a U.S. Supreme Court decision last month that overturned his core tariff agenda. Importantly, even though the court struck down his broad “reciprocal” tariffs, his aides argue that it reaffirmed his right to impose an economic embargo against another country. Instead of threatening an Arctic island with a population of less than 60,000, Trump is this time venting his ire at a nation of 50 million with a $1.7 trillion economy.  The EU’s fourth-largest economy is a big buyer of U.S. liquefied natural gas, which covered an estimated 30 percent of its gas needs last year. On the export ledger, Spain sells olives, wines and cosmetics to the U.S. German Chancellor Friedrich Merz said: “There is no way that Spain will be treated particularly badly” on trade as a member of the EU, and insisted that he wanted to avoid correcting Trump in public. | Kay Nietfeld/picture alliance via Getty Images Yet the U.S. accounts for only 4 percent of Spain’s total global exports, according to the Ministry of Economy. It also ran a bilateral trade deficit of €16 billion in 2025, meaning that, in principle, that the U.S. would stand to lose more if commercial relations were completely blocked. FIRST CRACKS  Spanish Foreign Minister José Manuel Albares said he had conveyed his “surprise” to his German counterpart Johann Wadephul that Merz didn’t show solidarity in the face of Trump’s attacks. “A few weeks ago Trump aimed his threats against Denmark and Germany and others over Greenland. Today, it is against Spain. Tomorrow it could be Germany again or any other EU member. It’s more important now than ever to remain united,” said a national official, who was granted anonymity to discuss the sensitive matter.  The European Commission also took the threat seriously, vowing on Wednesday to “ensure that the interests of the European Union are fully protected.”  “We stand in full solidarity with all Member States and all its citizens and, through our common trade policy, stand ready to act if necessary to safeguard EU interests,” said Olof Gill, deputy chief spokesperson of the European Commission.  ALL FOR ONE It’s not immediately clear how Trump could, even if he wanted to, impose a watertight embargo on Spain — since the EU functions as a barrier-free common market of 27 nations it would in practice be quite easy to circumvent it. But, even after his sweeping “reciprocal” tariffs were struck down, he would have the legal means at his disposal to inflict serious measures on Spain — as he did when he jacked up tariffs against Brazil over its jailing of former President Jair Bolsonaro. Spanish Foreign Minister José Manuel Albares said he had conveyed his “surprise” to his German counterpart Johann Wadephul that Merz didn’t show solidarity in the face of Trump’s attacks. | Eduardo Parra/Europa Press via Getty Images Trump could order an investigation under Section 301 of the U.S. Trade Act of 1974, which covers trade trade discrimination. An alternative would be a probe under Section 232 under the Trade Expansion Act of 1962, into imports that threaten national security. “From a legal perspective, yes, it is possible,” said Charles Julien, a partner at White & Case’s international trade practice group. “There are of course limitations.”  “Under Section 301, there’s a possibility for the U.S. Trade Representative to impose a number of measures. These include duties and restrictions. These are the most commonly used. Then there’s the possible withdrawal or suspension of trade agreement concessions,” Julien told POLITICO.  The lawyer stressed that the situation was still “very unclear. There may be other provisions in other U.S. statutes that may be used for that purpose.”  The drawback for Trump is that any measures would have to be preceded by an investigation that could last up to a year. In the meantime, confidence in the U.S. among European lawmakers who are still deliberating over whether to approve the Turnberry accord has hit new lows. Top trade lawmakers in the European Parliament decided on Wednesday, again, to defer a vote to advance enabling legislation under which the EU would fulfill its side of the bargain — chiefly to eliminate tariffs on U.S. industrial goods. “A trade threat against an EU country is worsening the mood in the Parliament,” said Anna Cavazzini, a German Green lawmaker who sits on the trade committee. Milena Wälde, Nette Nöstlinger and Max Griera contributed reporting.

BRUSSELS — The EU doesn’t want to be dragged into the U.S.-Israeli war with Iran. It might not have a choice. With a drone striking a British airbase in Cyprus, Europe’s geographic proximity to the conflict might override many of its governments’ initial skepticism about Donald Trump’s decision to, as he put it on Monday, “eliminate the grave threat posted to America by this terrible terrorist regime.” So far, the EU’s response has been focused narrowly on the impact on EU citizens in the Middle East — especially as Tehran has launched a wave of counter-strikes across the region — and the spillover effects of increased energy prices, disruption to air and sea transport, and a potential influx of refugees. As if to illustrate how Brussels sees its limited role in the crisis, European Commission President Ursula von der Leyen described on Monday the range of fields she was focusing on “from energy to nuclear, from transport to migration to security.” She said: “We must be prepared for the fallout.” In the absence of leverage with the Israelis or Trump, von der Leyen convened a “security college” on Monday: a less-common formation of commissioners where several of them provide updates to their colleagues on issues related to the current crisis. After the meeting, the Commission said in a statement that it planned to respond to the Iran conflict by supporting EU countries and protecting Europeans from its “adverse consequences.” The EU is “exchanging information on what is happening and monitoring the situation,” said an EU diplomat with knowledge of the discussions, granted anonymity to discuss the confidential talks. “We should have, in normal times, been talking to the American administration. We should have had an adult conversation with the Israelis. None of that seems to be possible … The EU finds itself limited to a side role.” In practice, the Commission’s aims amount to helping capitals evacuate their citizens from the region and monitoring any disruptions to air traffic and key maritime routes such as the Strait of Hormuz, through which shipments of oil and liquefied natural gas from Gulf states pass. Intelligence assessments point toward a heightened risk of Iran mounting terror attacks in Europe, a second EU diplomat said. DEFENSE CLAUSE The EU will also monitor prices and supply levels of energy. The Commission is to convene an energy task force with EU countries, liaising with the International Energy Agency, with a first meeting expected this week. But the EU has yet to publicly address the topic of how to bolster Cyprus’ defenses. Nicosia has not activated the EU’s 42.7 collective defense clause ― similar to NATO’s Article 5 where all members come to the assistance of one of their allies ― as France did in the wake of the Bataclan terror attacks in Paris in 2015. If Cyprus did so, the move could signal the bloc becoming a party to the war. It was left to Greece to respond to the threats to Cyprus, with Athens sending two frigates and a pair of F-16 fighter jets to the island, which is less than 500 kilometers from Israel. Cyprus, which holds the six-month rotating presidency of the Council of the EU, will on Tuesday host a meeting of the Integrated Political Crisis Response (IPCR) group to “look into the implications of the evolving situation,” according to a third EU diplomat aware of the preparations. The IPCR was previously convened to respond to the Covid pandemic and Russia’s full-scale invasion of Ukraine, among other crises. The uncomfortable truth is that the EU doesn’t have enough leverage in the region to make any meaningful moves. “This is something the U.S. and Israel have been gearing up for against their arch nemesis Iran. The EU was not prepared in the run-up to it,” said the first EU diplomat. “We now sit there like spectators because we are not an active player in this war.” Gabriel Gavin contributed reporting.

BRUSSELS — Qatar’s huge state-owned gas company halted production of liquefied natural gas on Monday in the wake of Iranian attacks on key energy infrastructure, sending gas prices skyrocketing and compounding fears of an energy crisis. QatarEnergy accounts for nearly 20 percent of the global LNG trade, and is the fourth largest supplier of LNG to the EU, accounting for 6 percent of the bloc’s total intake. The benchmark LNG price in Europe soared as much as 25 percent after QatarEnergy announced it had “ceased production of … LNG and associated products” following military attacks on operating facilities in Ras Laffan Industrial City and Mesaieed Industrial City. A prolonged closure of the massive plant in the Persian Gulf would have a major impact on global supply of the fossil fuel used in electricity generation, heating buildings and powering industry. It follows U.S. and Israeli attacks on Iran which began over the weekend. EU member countries were already jittery about the prospect of airstrikes on energy facilities in the Strait of Hormuz, a key chokepoint for seaborne shipments of oil and liquefied natural gas from Gulf states. All Qatari LNG passes through the Strait of Hormuz. EU countries already kicked off 2026 with lower gas reserves than in recent years, with 46 billion cubic metres at the end of February 2026, down from 60 billion cubic meters in 2025, according to Bruegel.