The Middle East situation stirs up the energy market, European officials gather in Boao to focus on energy security | Boao Moment

Topic: Boao Asia Forum 2026 Annual Conference

Since the outbreak of the Russia-Ukraine conflict in 2022, energy transition will once again become Europe’s “collective consciousness.”

“Due to the current Middle East conflict, panic has arisen in Europe, and Slovenia is no exception,” Tuerk, former president of Slovenia, who is attending the Boao Asia Forum 2026 Annual Conference, told Yicai on the 25th.

Because of the implementation of price cap policies, Slovenia’s gasoline prices are lower than those of neighboring countries like Austria, prompting residents to “cross-border refuel,” with long lines at border gas stations, and some even experiencing temporary supply disruptions. To curb cross-border refueling and hoarding, the Slovenian government officially introduced fuel purchase restrictions last week, becoming the first EU member to implement such measures.

Under the new rules, Slovenian citizens can buy a maximum of 50 liters of fuel per day, while companies and farmers have a limit of 200 liters daily.

Tuerk was not surprised by this policy, as soaring oil prices are affecting the daily commuting and farming activities of Slovenians.

“Slovenia has a small territory and dispersed settlements. People living in small towns or villages must drive to work, so rising fuel prices have a significant impact on local residents,” he told Yicai. “Additionally, it is spring farming season now, with high demand for tractors and farming tools, and farmers are very worried about whether there will be enough fuel for spring fieldwork.”

“America and Israel’s military actions against Iran are a huge mistake, which has led to rising oil prices, and this could have been completely avoided,” Tuerk said during a media group interview. “One of the urgent global needs now is to stop the war and do everything possible to stabilize the global oil market.”

Europe takes multiple measures to address the energy crisis

Following recent easing of Middle East tensions, oil and gas prices have fallen. As of the time of reporting, the nearby month contract for Dutch TTF natural gas dropped 7.68% to €50.1 per megawatt-hour, but still nearly 70% higher than levels during the current Middle East conflict. Brent crude oil prices slightly declined over 1% to $94.76 per barrel, but are still up 30% compared to pre-conflict levels.

Nevertheless, Europe’s energy situation remains severe.

According to CCTV News, earlier this month, QatarEnergy announced that due to drone attacks on two of its energy facilities by Iran, it decided to suspend liquefied natural gas production. Qatar’s natural gas reserves rank third globally, making it one of the world’s most important natural gas producers.

Adding to the woes, last week, the facility suffered “further extensive damage” during a ballistic missile attack. QatarEnergy CEO Saad Sherida al-Kaabi warned on the 19th that repairs could take three to five years, and stated that Belgium and Italy would be affected because the company could no longer fully fulfill its contractual production obligations. Fluctuations in natural gas supply have put Europe—highly dependent on natural gas-fired power generation—under a “triple squeeze” of high oil prices, high gas prices, and high electricity prices.

So far, the impact of energy price fluctuations has been reflected in economic data. The European Central Bank’s baseline forecast last week showed consumer price index (CPI) rising by 2.6% this year. If energy supply disruptions continue, inflation could reach 6.3%, far exceeding the medium-term inflation target of 2%. According to initial data from S&P Global, the eurozone’s March composite PMI fell from 51.9 in February to 50.5, below analysts’ forecast of 51, and the lowest since May last year, but still barely above the 50 expansion/contraction threshold.

ECB President Christine Lagarde said on the 25th that if current energy costs continue to surge, it could trigger broader inflation, and the ECB will take decisive action, but is currently assessing the impact of the Iran war.

Europe accelerates energy transition

Since the outbreak of the Russia-Ukraine conflict in 2022, energy transition may once again become Europe’s “collective consciousness.”

International Energy Agency Executive Director Fatih Birol said at a press conference on the 23rd: “One of my expectations is that accelerating the development of renewable energy will be a key response to this crisis. Not only does renewable energy help reduce emissions, but it is also a domestic energy source.”

Gonzalo Escribano, senior researcher on energy and climate at the Elcano Royal Institute in Madrid, also believes that after the conflict, countries’ views on renewable energy have “certainly” changed. “Renewable energy and related technologies are now widely seen as a tool for energy security, no longer just a way to address pollution and climate change, but a geopolitical asset supported by pragmatic rather than idealistic considerations,” he told the media. “This is true even among governments and citizens indifferent to environmental issues.”

At this year’s conference, former Finnish Prime Minister Aho explained to Yicai the security anxiety Europe faces due to reliance on a single energy source.

“In the early 1970s, natural gas imports from neighboring countries accounted for 45% of Finland’s energy, and although prices were reasonable and supply was secure, we still believed over-reliance on a single country’s energy exports was unwise. Germany took a different approach. Until 2010, Germany continued increasing dependence on Russian natural gas. Before the Russia-Ukraine conflict, Germany’s reliance on Russian gas reached 27%. As neighbors of Russia, we only relied on 5%,” Aho said. “This vividly illustrates how dangerous over-reliance on a single energy source can be.”

Currently, the UK has taken the lead. The UK government announced on the 24th that all new homes in England must be equipped with heat pumps and solar panels. UK Energy Minister Grant Shapps stated that the Middle East conflict underscores the importance of developing clean energy for UK energy security, freeing the country from the constraints of uncontrollable fossil fuel markets.

Looking ahead to energy transition, Aho emphasized that predictability and flexibility are crucial. “Long-term investments like nuclear power require stable policy frameworks over decades, so governments must be able to create as stable a long-term regulatory environment as possible. Additionally, we need the capacity to adjust energy supplies in special circumstances, which was also on the agenda during Finland’s Prime Minister’s visit to China earlier this year.”

He believes that China and Finland can learn from each other in power generation and efficient utilization. “Electricity will be an important part of the digital economy and digital future, and I think strengthening cooperation with China in this field is vital.”

It is worth noting that amid the growing urgency of energy transition, the EU has simultaneously introduced the Industrial Accelerator Act (IAA), aiming to restart “European manufacturing.” According to the IAA, foreign companies investing in the four key sectors of batteries, electric vehicles, photovoltaics, and critical raw materials must face restrictions such as mandatory technology transfer, foreign ownership limits, local content requirements, and local employment ratios. These restrictions specifically target investors from third countries with over 40% global capacity share in these industries. The law also explicitly prioritizes “EU manufacturing” in public procurement.

A Chinese Ministry of Commerce spokesperson said these measures constitute serious investment barriers and systemic discrimination, allegedly violating the Most Favored Nation principle, and further increase uncertainty for Chinese companies investing in the EU. China has expressed serious concerns. “China will closely monitor the legislative process, carefully assess its impact on Chinese interests, and firmly safeguard the legitimate rights and interests of Chinese enterprises,” the spokesperson stated.

Amid ongoing Middle East tensions and great uncertainties in energy and trade prospects, Tuerk told Yicai that regarding the relationship between promoting domestic manufacturing and accelerating energy transition, “I believe this requires understanding from EU partners, because everyone must accept a reality: the EU needs not only service industries and agriculture but also industrial production and manufacturing. Defining Europe’s future industrial landscape through manufacturing modernization is a top priority.”

He cited the photovoltaic industry as an example, noting that China is a superpower in PV technology production and use, but Europe also has PV manufacturing technology. The current question is how China and the EU should define a common language in the PV field and negotiate solutions for integrating local capacities in Europe and China. “We need to negotiate more deeply and thoroughly than ever before on this shared demand—‘we’ refers to the EU and China,” he said.