• Europe has paid roughly $32 billion extra for oil and gas since the war began, underscoring its reliance on imported fossil fuels.
  • The renewed energy shock is hitting growth and households, prompting the EU to accelerate renewables, grid upgrades, and diversification.
  • Brussels is pushing for coordinated action to avoid bidding wars on global energy markets and stabilize prices.

Europe’s Growing Energy Tab

European Commission President Ursula von der Leyen has warned that the cost of imported oil and gas has skyrocketed since the start of the war, adding about €27 billion ($32 billion) to the bloc’s energy bill in just the first six weeks of conflict. “Europe has paid hundreds of billions more for fossil fuels,” von der Leyen said, highlighting the vulnerability of an economy still heavily dependent on imported energy. The surge comes amid heightened Middle East tensions, which have further strained global supply chains and pushed prices higher. According to people familiar with the matter, EU officials are now weighing emergency measures, including potential price caps and expanded storage requirements, to shield consumers and industry from further volatility.

The Race for Domestic Supply

The crisis has sharpened the EU’s focus on building homegrown energy capacity. Renewables and nuclear are taking center stage, with the bloc’s AccelerateEU plan aiming to fast-track grid connections and energy storage to prevent clean power from going to waste. “We cannot afford to leave any megawatt stranded,” von der Leyen said, calling for streamlined permitting and cross-border interconnections. The EU is also exploring small modular reactors as a complement to its renewable push. While renewables and nuclear now account for a growing share of electricity generation, the gap between domestic supply and demand remains wide, leaving the bloc exposed to global price swings.

Avoiding a Bidding War

A key concern for policymakers is the risk of EU member states competing against each other for limited gas supplies. “We need coordination to avoid a bidding war on international markets,” a senior EU official said, speaking on condition of anonymity. The European Commission is considering reforms to the Emissions Trading System’s Market Stability Reserve to help temper price spikes, alongside investments in gas storage and interconnectors. Without a unified approach, analysts warn that individual countries could drive up prices further, deepening the economic pain. “The EU must act together, or it will be picked apart by global suppliers,” said one industry expert.

Economic and Social Strain

The higher energy costs are already weighing on Europe’s economy. Industrial production has slowed, and household energy bills have surged, fueling inflation and dampening growth prospects. In the long term, the EU sees its energy transition as the only sustainable path to stability. But in the near term, families and factories are bearing the brunt. The commission has said it will continue to monitor the situation and stands ready to deploy further tools if needed. “We have the means to weather this storm, but only if we act decisively and together,” von der Leyen noted in a recent speech.

Clarification: This article has been updated to reflect that the $32 billion figure refers to the first six weeks of the conflict.