Insight
Energy shock 2.0: Lessons from 2022 for the Hormuz crisis by Elisabetta Cornago and John Springford, 13 April 2026 If the Strait of Hormuz stays closed, Europe will face as serious an energy crisis as it did in 2022. This time, energy poverty policies must be more targeted, and electrification more ambitious. For the second time this decade, Europe is facing an energy crisis prompted by a war someone else started. At the time of writing, the Strait of Hormuz remains largely closed, with fewer than 15 tankers a day passing through, compared to 140 before the war. Iran remains in control of the strait, and is reportedly demanding up to $2 million in crypto payments for ships to pass. They would only be allowed through if they are registered in countries that did not take part in the war or allow their bases to be used by the US or Israel. Iran is also making maximalist demands for a permanent cessation of hostilities, including tolls on the strait, the right to enrich uranium, an end to sanctions and the removal of US troops from bases in the Middle East. Negotiations are yet to move Iran from these positions. By comparing the current situation with the energy shock that followed Putin’s full-scale invasion of Ukraine in 2022, it is possible to sketch best and worst-case scenarios for the European economy, based on oil and gas supplies already lost due to damaged infrastructure, and the potential long-term closure of the strait. In a worst-case scenario, the energy shock will be worse than in 2022, but the macroeconomic and energy context has changed. Europe can learn lessons from what went right and wrong last time, and adjust policy accordingly. Governments can support people being plunged into fuel poverty without subsidising fossil fuels for everyone. Demand is weaker than it was, so policy-makers should avoid a rush to tighten macroeconomic policy. And two fossil-fuel crises in four years show that governments should accelerate the energy transition. The Strait of Hormuz: Best and worst cases So far, the oil price rise is similar to that at the height of the 2022 shock, while gas and electricity price increases have been more muted (Chart 1). This is because oil markets are more forward-looking than gas CER INSIGHT: ENERGY SHOCK 2.0: LESSONS FROM 2022 FOR THE HORMUZ CRISIS 13 April 2026
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