Oil and gas supplies to Europe have been disrupted due to conflicts occurring in both the Persian Gulf and Eurasia. On Friday, Saudi Arabia notified European refineries that crude oil supplies should not be expected next month. The continent will require a combination of luck and well-thought-out policy to cope with the developing energy crisis.
Conflicts unfolding on the periphery of the European Union—in the Eastern Mediterranean, the Red Sea, the Strait of Hormuz, the Black Sea, and the Caspian Sea—have demonstrated Europe's inability to secure critical energy supply chains. Due to insufficient infrastructure for strategic oil and gas reserves, reliance on spot markets, and increasing weather volatility, Europe needs luck.
Houthi forces are actively advancing along Yemen's southwest coast in the Red Sea. On September 10, they captured Mocha port; on September 11, they seized Mayun/Perim Island in the Bab el-Mandeb Strait; and on September 14, they reportedly occupied the Great and Little Hanish Islands. These islands are located directly on tanker and LNG routes entering the Red Sea, making even a limited Houthi presence commercially significant. Although the strait is not physically closed, territorial control allows the Houthis to disrupt traffic.
Abdi Gulled, editor of Horn Briefs and former correspondent for AP and Reuters, told Middle East Eye: 'The Houthis do not need to physically close the Bab el-Mandeb to gain strategic advantage from their position.' War risk insurance premiums for transit through the Red Sea have sharply increased, and even the perceived threat could make regular voyages commercially unviable.
Early signs indicate a decline in vessel transit as major insurance companies refuse war risk coverage for the Bab el-Mandeb, and shipping companies reroute vessels around the Cape of Good Hope, increasing voyage duration by 10–14 days and raising costs across the global supply chain. These disruptions in the Red Sea occur while global markets are still recovering from the months-long closure of the Strait of Hormuz earlier this year. The cumulative effect is visible in European inflation data: reduced supply, rising shipping costs, and refinery downtime directly impact prices for diesel, electricity, and food.
The closure of Hormuz from February to early September removed about 17–19 million barrels per day from world markets, forcing Europe to rely more heavily on supplies from the Atlantic basin and the Caspian Sea. Saudi Arabia partially mitigated this blow by redirecting crude oil through its East-West pipeline to the Yanbu export terminal in the Red Sea, increasing flows—until recently—from about two million barrels per day at the start of the year to around six million barrels per day. Technically, the pipeline can transport up to seven million barrels per day, but the capacity of Yanbu somewhat limits this figure.
A drone attack on the pumping station on September 11 led to the immediate shutdown of the East-West line, and as of the article's writing, it is unclear when it will reopen. Konstantinos Stambolis, chairman of the Institute of Energy for Southeast Europe, told MEE: 'The current energy crisis is turning into a global financial crisis, the symptoms of which are now evident in Europe, as Eurozone inflation accelerates to 3.3 percent, and energy inflation jumps to 14.3 percent.'
Four seas, two wars, one market
Europe's dilemma is that conflicts restrict energy supply from both Russia and the Persian Gulf. Ukrainian strikes on Russian refineries and export terminals created production constraints for Russian supplies just as European sanctions restricted alternative inflows.
US President Donald Trump stated this week that the two countries agreed not to attack energy targets, but Kyiv noted that this was conditional and there is no public confirmation from Moscow. One of Europe's hopes for diversifying supplies outside the Middle East was Kazakhstan, a country that has quietly become one of the few producers capable of easing Europe's tightening oil balance.
However, Kazakhstan's main export artery is the CPC pipeline, which processes over 80 percent of the country's crude oil exports but delivers the raw material to the loading terminal in the port of Novorossiysk on the Black Sea of Russia. John Roberts, former editor of Financial Times Energy and research fellow at the Atlantic Council, notes: 'There is a difference between a deficit and a full-blown crisis, but Europe is now vulnerable because several supply routes are under strain simultaneously.'
Roberts added that 'Ukraine seems capable and indeed ready to attack Novorossiysk,' which prevents Kazakhstan from relying on its primary outlet when alternative routes are limited. The Caspian Sea is a logical substitute for the Black Sea route, with energy transported through Azerbaijan and Turkey. Along this route, tankers pass through the Caspian Sea and enter the Baku-Samsarçay pipeline, which can process about 150,000 barrels per day—significantly less than typical Kazakh export volumes. Additional volumes could be directed via the Baku–Tbilisi–Ceyhan pipeline, making Azerbaijan's infrastructure key to Europe's energy security.
But the Caspian route is not safe either. On July 25, a Ukrainian drone struck an Iranian vessel in the Caspian Sea. This strike proved that such attacks are possible and could recur. Currently, an agreement between Kyiv and Tehran has reduced major concerns. Undoubtedly, this also presents an existential challenge for Central Asian states. If Kazakhstan cannot send oil west, China will become the default buyer, reducing volumes available to Europe.
Regulation exacerbates volatility
Experts are now hoping for inflation moderation through 'demand destruction'—when poorer countries reduce consumption because they cannot afford high prices, thereby redirecting supply to Europe. Weather is a key factor: a mild winter will give Europe a break, but the impact of weather on fossil fuel demand is far from clear.
According to reports from Rystad Energy and ICIS, the El Niño climate pattern for 2026–2027 will change Europe's energy consumption volume over the next year. In a July 2026 assessment, analysts warned that while a milder start to winter from December 2026 to January 2027 might initially lower heating demand, a sudden atmospheric shift could cause severe cold snaps in February 2027, leading to a spike in gas and electricity consumption at the end of winter.
Furthermore, historical ICIS data shows that strong El Niño events can reduce wind energy generation in Europe to 9.8 percent during winter months, forcing power plants to burn more natural gas to maintain lighting. However, regulation limits Europe's ability to respond to short-term and medium-term pressure.
EU methane rules, coming into force in 2027, will require gas and LNG importers to confirm that foreign producers comply with EU monitoring and verification standards. Analysts like Ben Cahill from CSIS believe this will immediately divide the market into compliant and non-compliant exporters. Many producers lack the necessary equipment and data systems to meet EU monitoring standards, meaning that compliant gas may become more expensive. This will likely affect suppliers from Central Asia.
Central Asian countries, such as Kazakhstan and Turkmenistan, are exploring ways to access the European market. However, this requires establishing critical infrastructure to transport Kazakh oil or Turkmen gas through the Caspian. This is difficult because the EU cannot offer investment capital or long-term contracts for oil and gas projects due to environmental regulations. One proposal is the creation of a short interconnector with a capacity of about five billion cubic meters between Turkmenistan's offshore platforms and Azerbaijani platforms. Proponents estimate the cost of laying such a line at approximately $500 million—or closer to one billion if the line is ultimately intended to transport 10–12 billion cubic meters. Such a pipeline would pass through the territorial waters of only two countries, which, according to the 2018 Convention on the Legal Status of the Caspian Sea, reduces Moscow's and Tehran's ability to block the project. Nevertheless, Moscow and Tehran could use environmental impact assessments to exert pressure.
Europe's energy crisis is turning into an industrial and inflationary challenge that cannot be solved through political or regulatory measures. While Europe may fully transition to renewable energy in the long term, politicians have little to say in the short term to alleviate fears. Here, luck matters more than politics.
