Is the reopening of the Strait of Hormuz a threat to the European energy transition?

Translated by Martina Ravasi

Edited by Pierpaolo Piras

On June 14th, 2026 the United States and Iran signed a memorandum of agreement aiming to reestablish the full practicability of the Strait of Hormuz. The immediate reaction of the markets was radiating happiness, since oil and liquefied gas prices lowered, and newspapers welcomed a new decrease in bills. At first sight, it seems to be some good news. However, in energy politics immediate good news can turn into bad strategic news extremely easily.

Data

A fifth of global oil passes through the Strait of Hormuz, and the same goes for liquefied gas. When tensions with Iran began to reduce trade traffic drastically in March 2026, this figure was no longer a mere statistic and ended up increasing energy prices and industrial costs. Furthermore, bill costs became higher, thus affecting family budgets from Cadiz to Tallinn.

In Spain the direct impact of this situation was relatively contained. Indeed, only 2% of their gas supplies pass through the Strait of Hormuz, while most of them come from Algeria and the United States through LNG sea routes. For instance, in 2026 33% of Spain gas supplies come from Algeria.

If we consider gas supplies themselves, Madrid did a good job. On the contrary, if we look at structural transformations, there is still a long way to go. Oil and gas move on global markets and when there are issues in the Strait of Hormuz, their consequences can be perceived in Paris, Seville, and Brussels.

The EU keeps remains dependent on liquefied gas

During the months when tension was at its peak, the European Union reacted unexpectedly rapidly. A good example of this can be illustrated by the increase in the number of authorizations for solar panels and auctions for wind turbines. Moreover, several member States accelerated their commitments on industrial electrification. These are concrete results that are worth recognizing unconditionally.

However, if we take into consideration where most emergency energy budgets were allocated, the framework changes. The AccelerateEU package – Energy Union, presented by the European Commission last April, provided for further 24 billion euros in favour of fossil fuels since the beginning of the crisis.

According to the estimations from the report, most budget was allocated to replace the LNG of the Persic Gulf with the LNG coming from the US, Qatar and Australia rather than financing a structural electrification. Therefore, Europe spent so much money to be dependent on gas, but they simply opted for new suppliers whose prices aren’t still affected by global shortages.

Changing supplier doesn’t necessarily mean changing a model!

When oil is cheap, energy transition slows down

Political pressures to accelerate energy transition don’t really depend on climate rhetoric or international agreements. On the contrary, the reason behind them is more banal, namely the price of energy when we look at our bills. If costs increase, governments take action. If they decrease, there is no need to rush.

Political incentives to invest in renewable energies, reform electrical energy markets and isolate buildings drop when a barrel is around 70 dollars instead of 110. The reopening of the Strait of Hormuz doesn’t eliminate the structural geopolitical risk – both Iran and the Strait will remain as they are – but it weakens the immediate perception of it considerably. And it’s this perception itself that is the reference point for budgets, legislative priorities and political courage.

History confirms this dynamic

Following the oil shock in 1973, industrialized countries realized ambitious projects of efficiency and energy diversification. Then when prices dropped in the 80s, lots of these projects were put aside silently. Therefore, in 2022 Europe was still dependent on Russian gas, which is unacceptable for any serious analysis of risks.

Academic literature describes this mechanism clearly. Energy policies are dismantled more easily when the topic is no longer at the core of public opinion. The risk is that this cycle will be repeated with the usual amnesia during periods of calm.

As long as energy is expensive, new opportunities aren’t taken into account. On the contrary, when the memory of a shortage and political pressures are still alive, that’s the right moment. This is the situation where we find ourselves now as part of the Western world.

The destination is decided, but the speed has a political nature

The juridical starting point is strong. In December 2025, the European Parliament and Council reached an agreement on the European law for climate stipulating that net greenhouse gas emissions must be reduced by 90% by 2040.

The destination is binding and can’t be at issue. Everything that leads to that goal depends on the political will of each budget cycle: the speed with which the Renewable Energy Directive will be implemented, the annual resources for industrial electrification, the efficiency of permitting for renewable energy plants, and the pace of distribution grid reform. These are discretionary levers of implementation, and that is precisely where the drop in oil prices becomes insidious. It does not erase the objective, but it anesthetizes the urgency of the intermediate milestones indispensable to achieve it.

Three measures can make transition less exposed to market trends:

The first one is to respect and make everybody respect the European law on climate and the Directive on renewable energies (RED III). Indeed, some member States still haven’t internalized this norm – including Spain. A juridically binding target can’t be hostage to the political mood of the moment.

The second one is to establish mechanisms of anticyclical fundings. They are funds that are topped up when fossil fuels are expensive and then invested in energy transition when prices decrease. The “Clean Industry Pact” may play this role, provided that it is turned from a political communication tool into a binding guideline.

The third one is to anchor the public narrative of the energy transition to long-term structural risk, rather than to the seasonal fluctuation of the barrel.

Only then the political visibility of the problem won’t vanish with every temporary relief of the markets.

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