Energy Security amid Geopolitical Instability: Lessons from the 2026 Strait of Hormuz Shock
policy
Abstract
The effective closure of the Strait of Hormuz in late February 2026, following the United States-Israel attack on Iran, triggered one of the most significant energy supply shocks in recent history, severely affecting global oil and liquefied natural gas (LNG) markets. While Europe is relatively insulated from disruptions to gas supplies in the Middle East, sourcing only around 8% of its LNG imports from the region, it remains highly exposed to oil market disruptions, with both rising prices and potential supply shortages posing significant energy security risks. Nevertheless, the shock also affected European gas markets, as heightened competition for LNG cargoes outside the conflict zone increased import costs despite the absence of immediate physical shortages. Similarly, the scarcity of oil in the global market led to rising prices, directly affecting households and businesses in Europe. This crisis once more exposed Europe’s dependence on imported fossil fuels. This article discusses how European governments have reacted to the shock, with a focus on fiscal measures, and looks at short-to long-term actions that the EU could take to ensure European energy security.