Writing about the state of the EU anymore feels a bit like beating a dead horse. The seeking out of more expensive fossil fuel energy options, deindustrialization, and militarized neoliberalism has been on autopilot for years and with it the steady decline in European citizens’ standard of living.
We’ve covered it at some length, and historians will likely look back with puzzlement at how the European publics didn’t stage a revolt.
Yet every so often the bubble of that slow and steady decline is punctured by outside events that accelerate the economic deterioration and plop a great big fork down in the road. Does the EU continue with the anti-Russia suicide mission or does head for the off ramp under the cover of major crisis elsewhere?
Ansar Allah’s Red Sea blockade of shipping from nations supporting Israel’s genocide of Palestinians was one such instance, and we know which path European rulers chose.
Will they make the same mistake again now that Iran has closed the Strait of Hormuz for countries backing the US-Israel war of aggression—and Ansar Allah is threatening to do the same at Bab el Mandeb?
It’s hard to see how they can. An EU that refuses affordable Russian energy options (countries still pay a premium for LNG and rerouted oil) and without access to hydrocarbons from the Persian Gulf might be one that will no longer puzzle the historians as societal upheaval could be swift.
The strategy, for now, appears to be to bury their heads in the sand.
Compounding Crises
EU economy chief Valdis Dombrovskis reportedly informed finance ministers last week that the bloc could be looking at a 0.4 percentage point drop (down from predicted 1.4%) in economic growth this year due to Brent oil prices lingering around $100 per barrel and elevated gas prices, which could push inflation above 3% this year.
That sounds more like a wildly unrealistic best-case scenario, and Dombrovskis isn’t the only one engaged in magical thinking:
They might want to start thinking more about other shortages rather than just oil and a hit to growth. On the LNG front with QatarEnergy offline for the foreseeable future, the EU is locked in a bidding war with Asian markets, and European gas prices are already at 70 euro per MWh, which is twice as high as the price of gas before the war began. Here’s OilPrice:
As usually happens when a shortage emerges in a market, buyers sought alternatives, which resulted in LNG cargos originating from the U.S. Gulf Coast and headed for Europe getting diverted to Asia. Bloomberg reported this week that at least nine U.S. LNG cargoes have been diverted so far, but there will probably be more. Asian gas prices are more enticing for U.S. LNG producers until the European market catches up, meaning the price of gas rises enough to motivate selling more liquefied gas to the Europeans…The question, however, is whether there is enough LNG to go around…
Yet there is a twist this time around. Europeans are not in a real rush to buy all the LNG they can get their hands off, which has improved availability for Asian buyers. The reasons, per analysts cited by the Financial Times, have to do with greater availability of U.S. LNG on the spot market and EU methane regulations.
The availability of U.S. LNG on the spot market seems to have made some buyers in Europe sort of complacent in the belief that they could start buying more later in the year, after the Middle East disruption is over. This may sound like a pretty dangerous assumption, but it is an assumption some in Europe appear to have made.
Goldman Sachs, on the other hand, is saying euro-area inflation could reach 4.4% by the end of 2026 in a “very-adverse” scenario.
Unsurprisingly, Dombrovskis isn’t overly concerned. This is the same guy who back in 2022 waved off Europeans’ anxiety with its Atlantic ally’s Inflation Reduction Act (IRA) and its billions in subsidies for electric cars, batteries, renewable energy products and consumers who buy such American-made products.
The IRA passed as Europeans’ sacrificed Russia energy for the Project Ukraine cause—and their industry became even less competitive as a result—but Dombrovskis cautioned that there is “the danger of conflating the Inflation Reduction Act with our broader relationship with the United States.”
And so European officials quickly blamed China and Russia instead as the US poached its industry.
Dombrovskis also doesn’t mention other supply chain body blows like pharmaceutical shortages, fertilizer shortages, or fuel oil shortages:
[ICYMI] COLUMN: While the price of Brent crude remains well below its record high, the cost of fuel oil has surged above the 2022 and 2008 peaks.
The spike is a big problem for the workhorse of globalisation: the container ship.
My @Opinion column: https://t.co/fht4fu3gMf pic.twitter.com/egKyghwJSg
— Javier Blas (@JavierBlas) March 16, 2026
More Nightmare Scenarios
The scary news for Europeans is that the situation could get a lot worse than just a Strait of Hormuz closure.
That’s because there is a very real possibility that Azerbaijan becomes a target of the Iranian response. Israel is a close ally with Baku, and it is strongly suspected that drone attacks on both Russia and Iran have originated from Azerbaijan territory. The most recent European Commission Quarterly Report on Europe’s Gas Markets, which covers Q2 2025, has Azerbaijan providing five percent of the EU’s total gas imports (eight percent of its pipeline imports).
Russia, via the TurkStream pipeline, is still providing 10 percent. And yet NATO-backed Ukraine continues its efforts to knock TurkStream offline. Gazprom reported on March 11, that there were 12 attacks on its pipeline infrastructure to Turkey in the past two weeks.
Europe’s benchmark gas prices still have a ways to go before reaching 2022 levels:
But should Azerbaijan and/or Russia via Turkey routes go offline, the EU would suddenly be even more desperate for American LNG and be forced to pay a premium to secure it. And that has cascading effects:
Natural gas supply shocks have stagflationary effects in the €zone. A 10% increase in gas prices raises core prices by ~0.5% and reduces economic activity. Gas shocks pass through to core prices more strongly than oil shocks, due to role of gas in European electricity production pic.twitter.com/uu2euHOwRY
— Philipp Heimberger (@heimbergecon) March 11, 2026
So one might think it’s time to start rethinking the bias against Russian energy and the whole bottomless money pit in Ukraine.
Many no doubt are, and some are even saying so publicly. Belgium’s Prime Minister Bart De Wever called for a “normalization” of relations with Russia. Although he was already persona non grata for his role as road block in the Russian stolen funds fiasco, and his foreign minister quickly walked back his statement, it’s a sign the dam might be about to break.
Others might be hesitant to voice similar views, what with Queen Ursula wielding her “tools” and Ukrainian Banderites threatening to off Hungarian Prime Minister Viktor Orban and his family. Von der Leyen announced yesterday that the EU will provide “technical support and funding” to help repair the damaged Druzbha pipeline, which sends Russian oil to Hungary and Slovakia. In return, she expects Orbán to back a €90 billion loan to fund Ukraine’s war effort. Notice that Ursula’s offer does not guarantee that oil will flow through Druzbha—just that the EU will provide assistance in repairs. Orban has been clear that he wants the oil to arrive before backing any loan deal:
To President @ZelenskyyUa:
No oil deliveries? No money. It’s that simple. pic.twitter.com/KXvrpWvsKP
— Orbán Viktor (@PM_ViktorOrban) March 17, 2026
Even if the oil arrives and Kiev gets its loan, it wouldn’t be surprising if the Ukrainians shut it down again afterwards.
The whole obsession with Hungary (and Slovakia) and their pipeline imports of Russian gas shows just what a theater of absurdity the EU is nowadays.
The problem is apparently that the gas comes via pipeline at a more affordable rate. That’s the logical conclusion to draw considering that countries like France and Italy, which have upped their Russian LNG imports, draw hardly any criticism from the Project Ukraine fanatics.
Speaking of Italy, it provides a fine example of the multi-year failure of the bloc’s ruling elite.
Let us recall that it was former Goldman Sachs bigwig, European Central Bank president, and unelected prime minister of Italy Mario Draghi who was a chief architect of the sanctions policy against Russia, as well as Rome’s energy policy in its wake. Italy was among the leaders in scaling up LNG storage facilities and filling them with Qatari gas. Despite running into problems with that strategy during the height of the Red Sea crisis, the country is in no better shape today. Qatar accounts accounted for roughly 30% of Italy’s LNG imports, far and away the EU leader. So what’s to be done now without Qatari gas?
The Qatari Shock: Italy Accelerates Nuclear Renaissance Plans Amidst LNG Collapse
The unfolding energy crisis in the Middle East, coupled with Italy’s heavy dependency on Qatari LNG, is pushing Rome to reconsider nuclear energy.
🧵 pic.twitter.com/43GJSCJ6yp
— Francesco Sassi (@Frank_Stones) March 15, 2026
Oh. And when, pray tell, could that be of assistance?
energy strategies in the face of the current crisis. Meanwhile, the first new Italian nuclear power reactor will likely not be completed until the country is facing another energy crisis in 15 to 20 years…
— Francesco Sassi (@Frank_Stones) March 15, 2026
Meanwhile, Draghi who now chairs something called the Bloomberg New Economy Advisory Board, is still treated as an economic wizard and periodically pops up to issue warnings on European competitiveness—sage advice that always demands more neoliberalism and ignores the elephant in the room: the EU decision to forego Russian gas.
The fact that his warnings are treated seriously despite his role in causing the crisis is a condemnation of the entire European media.
Italy has always been a tepid supporter of Project Ukraine and would almost certainly welcome back pipeline Russian gas (if Moscow were to cooperate). The situation is far worse up north where Sweden is busy detaining Russian “shadow fleet” captains, the Baltics are eager to get crushed, and how about Germany? There continues to be record levels of dissatisfaction with this government (just like the last) and the traditional major parties, and Chancellor Friedrich Merz is actually criticizing the US for relaxing sanctions on Russian energy while having trouble making up his mind on the war of aggression against Iran:
Merz’s spiel is no-nonsense, decisive leader with a firm hand for unpleasant but necessary action, but in reality he’s a bumbling, shilly-shallying sell-out, a strategic featherweight and moral windbag. https://t.co/4zoZY3hTvH
— Almut Rochowanski (@rochowanski) March 14, 2026
European nations, while providing logistical, financial, and other support for the US-Israel war of aggression, are running away from committing troops or other military assets to the conflict theater. They’re responding to Trump’s threats by promising to discuss how to open the Strait of Hormuz. Can’t wait to see what emerges from those talks.
Europeans might be making a show of distancing themselves from the Iran war:
Except it is since the US is clearly using its bases in Italy to support its operations against Iran, regardless of what the Italian government may claim. Suffice it to say that the 1954 bilateral agreement regarding the use of the bases is still classified to this day. https://t.co/TDHbBZrOug
— Thomas Fazi (@battleforeurope) March 11, 2026
🇮🇷🇺🇸🇩🇪 LMAO: German foreign minister wants to make a deal with Iran, to get oil.
🗣️ German Foreign Minister Wadephul:
“Safe passage through the Strait of Hormuz is not possible.
If the American Armed Forces are not able to secure this militarily, then European forces will… https://t.co/wpJg79oJfv pic.twitter.com/7g5DHJX0Bd
— Lord Bebo (@MyLordBebo) March 17, 2026
But they’ll have to do more than that if they want passage through Hormuz:
Macron called Mojtaba Khameini. He was told to choose a side. French ships can pass Hormuz if they expel US and Israeli ambassadors. Otherwise pound sand. https://t.co/02I9e1fRwp pic.twitter.com/NNPUZIHhlk
— Kathleen Tyson (@Kathleen_Tyson_) March 15, 2026
Find the most deluded response possible, and that’s probably the one the EU will settle on. Finnish President Alexander Stubb, a Trump golf buddy and considerer of nukes in Finland (since ruled out in “peacetime”), has worked out the obvious transaction with zero chance of success that will crush the EU on both energy fronts, and get a lot of people killed: European military support to secure the Strait of Hormuz in return for ongoing US military and financial assistance to Ukraine.
It’s unclear what reality Stubb is living in where the EU can offer any effective assistance in militarily opening Hormuz and where the US can sustain combat against Iran while simultaneously upping support for Ukraine, but this almost guarantees this what the EU will do.
Clinging to Atlanticism
Some are making the argument that the US-Israel war against Iran is some sort of master chess move to weaken China. If so, it’s backfiring spectacularly. But one could make the argument that it’s just as much about Europe —and as we can see, it’s more effective there where its Eastern energy connections are systematically cut off until American LNG is the answer, and European companies will continue to relocate to the US where energy prices are lower. More than that, however, it also helps China gain industrial market share as European industry becomes a thing of the past.
Arnaud Bertrand makes the case that the EU—and its member nations—will not survive in the world the US envisions.
Few things have annoyed me more since the start of the war on Iran than to hear some European politicians repeat the narrative that it was “all about China.”
One surprising (and disappointing) example was France’s Jean-Luc Mélenchon, the leader of La France Insoumise, France’s… pic.twitter.com/h2z201I6fp
— Arnaud Bertrand (@RnaudBertrand) March 11, 2026
He stresses the urgency of the question of who’s looking out for Europe, but one can argue that’s been a five-alarm fire for years now and we have our answer.
The current crop of EU rulers are composed of clueless ideologues or those long ago co-opted by some combination of intelligence-WEF-transnational finance and seemingly all aspire to be the next Tony Blair success story who offer their country up for a US-led bust out in return for personal enrichment.
