The costs of war
The war in Iran is disrupting oil and gas supplies from the Persian Gulf; the war in Ukraine is halting Russian diesel exports and reducing natural gas supplies. Germany, like other countries, faces astronomical prices and shortages.
BERLIN/WASHINGTON (our own report) – American energy experts are warning of a full-scale global energy crisis with prices for crude oil and natural gas skyrocketing. According to the US oil industry, there was enough capacity in the first six months of Washington’s war on Iran to compensate to some extent for the shortfalls caused by the blockade of the Strait of Hormuz. On the one hand, various Western states could draw on their strategic reserves; on the other, China has significantly reduced its imports, thereby easing demand pressures. But neither of these steps is likely to be sustainable. So further hikes in oil and gas prices have to be expected. Another critical factor is that Ukraine has managed to severely damage a number of Russian refineries with its drone attacks. This is leading to a diesel shortage: Russia, previously the world’s second-largest exporter, has completely halted diesel exports. While natural gas storage facilities in Germany and the EU are at their lowest levels ever for this time of year, Berlin and Brussels continue to insist on a total phase-out of Russian liquefied natural gas imports by early 2027. Most recent data shows that Russian supplies still account for 19 per cent of the EU’s liquefied natural gas imports.
No oil from the Gulf
The main cause of the rise in oil prices, however, remains the blockade of the Strait of Hormuz resulting from the US war against Iran. Prior to the American attacks, a good 15 million barrels of crude oil were transported through the strait every day.[1] The Trump administration is claiming it has now, by means of naval escorts, managed to facilitate the transport of around ten million barrels of oil per day through the narrow waters. Bu this assessment has not been explicitly confirmed by industry experts.[2] What is more, an alternative route, particularly for Saudi oil, is also being cut off. Since the start of the war, Riyadh began pumping increasing volumes of crude oil via its pipeline to Yanbu on the Saudi west coast – from where it could be shipped down the Red Sea, through the Bab al-Mandab Strait opposite Djibouti (known as the ‘Gate of Tears’) and across the world’s oceans. This route has now been closed in recent days. The Yemeni Houthis, who are longstanding enemies of Saudi Arabia, have brought the strait entirely under their control. This leaves Riyadh with only the option: it can export crude oil via the Suez Canal or through a pipeline that runs across Egyptian territory. The Egyptian pipeline can carry a maximum volume of 3.5 million barrels per day.[3] However, even these options are likely to be suspended for a while: an Iraqi militia has severely damaged the Saudi pipeline to Yanbu and it is expected to remain out of service for several weeks.[4]
Before the energy crisis
The fact that, since the start of the war, the price of Brent crude has only occasionally exceeded the 100 dollars per barrel mark and has consistently remained below 120 dollars a barrel is primarily due to two factors. First, a number of countries have been releasing parts of their strategic oil reserves. While this made it possible to fill supply gaps, these reserves have now shrunk significantly. In the US, for example, stocks have fallen by 30 per cent from just over 405 million barrels a year ago to only 285 million barrels – the lowest level since 1982.[5] Secondly, China has significantly reduced its oil imports. The figure for this year’s second quarter imports of crude oil stood at 8.1 million barrels a day, which is a sharp 32 per cent drop on last year’s daily imports.[6] This reduced demand offset a further rise in the price of oil. Both factors – the tapping of strategic reserves in the West and the People’s Republic’s push to import less – have helped to “alleviate the price and supply risk”, confirmed Chevron CEO Mike Wirth at the end of last week.[7] But both measures have run their course. Reports now indicate that China has begun to import more oil again, and the West has hardly any buffer left. Warnings of a full-blown oil crisis are now doing the rounds.
More expensive than ever
The shortage of crude oil is now compounded by a shortage of diesel in particular. This is due not only to the blockade of the Strait of Hormuz but also to Ukrainian drone attacks on refineries in Russia. Russia was the world’s second-largest exporter of diesel until Ukraine began attacking Russian refineries on a large scale. The damage significantly reduced output and forced the Russian government to temporarily ban diesel exports on 8 July in order to secure domestic supply. The export ban has since been extended until the end of September.[8] Major buyers of Russian diesel, such as Brazil and Turkey, are now forced to source their imports elsewhere, which is driving up prices. Currently, the price in Germany averages 2.40 euros per litre. In the US, it has soared to more than 6.20 dollars per gallon, which is 2.50 dollars more than a year ago. The price of diesel on the American market has never been this high. US refineries have long been operating at full capacity. Observers are already warning that if they were to reduce operations even slightly due to refinery breakdowns or even just necessary maintenance work, prices would likely soar even further.[9]
Gas reserves only half full
Germany and Europe, in particular, are also grappling with dramatically rising natural gas prices. Almost all the liquefied natural gas exported – primarily by Qatar, but also by the United Arab Emirates – must be shipped to global markets via the Strait of Hormuz. This means that just under 20 per cent of the liquefied natural gas traded globally is currently blocked.[10] In terms of pricing, the TTF futures contract, which is the wholesale benchmark for Europe, had stood at a high of around 30 euros per megawatt-hour even before the start of the war in Iran, yet last Tuesday it was fluctuating around 80 euros per megawatt-hour and at times leaping to more than 83 euros. This is higher than ever before, apart from the extreme peaks seen in the first year of the war in Ukraine. And there is no relief in sight, particularly as the price of LNG in Asia, i.e. gas customers with whom European buyers are competing, is also exceptionally high. The shortages are exacerbating Europe’s problem of its natural gas storage facilities. The current level stands at just 67 per cent. Germany, in particular, is being dragged down: German natural gas storage facilities are currently only 56 per cent full. At the same time last year, the figure stood at 75 per cent. Even with a comparatively mild winter, it was considered barely enough to secure the Federal Republic’s natural gas supplies in a geostrategic crisis.[11]
Russian LNG
Some German companies are already drawing up contingency plans,[12] but the federal government is playing down the situation. The federal economics ministry recently claimed in a report to the Bundestag Economic Committee that, “Based on what we currently know, a situation of gas shortage is not to be expected in the coming winter.”[13] Berlin policymakers are assuring the country that, should natural gas, contrary to expectations, become scarce in Germany, additional supplies can be procured at any time. It is to this end that new liquefied natural gas terminals were built on Germany’s North Sea and Baltic Sea coasts. Whatever happens, Berlin and Brussels remain committed to a complete phase-out of LNG imports from Russia by 1 January 2027. This policy is all the more astonishing given that the share of Russian LNG in the EU’s total LNG imports actually increased from 16 per cent in the first half of 2025 to 19 per cent in the first half of 2026. Replacing the just under one-fifth of LNG imports supplied by Russia will mean importing still more high-priced American LNG. If this happens, the US will strengthen its already dominant share of LNG imports into the EU, having risen from around 57 per cent in the first half of 2025 to 62 per cent in the first half of 2026.[14] LNG shipments from Qatar, for example, will not be part of any solution since Washington’s ongoing aggression against Iran has choked off this source.
[1] Strait of Hormuz Factsheet. iea.org February 2026.
[2] Usaid Siddiqui: US says it’s clearing Hormuz traffic: Why are oil futures beyond $100? aljazeera.com 14.09.2026.
[3] Sabine Balk: Angriff auf eine „Lebensader des Welthandels“. Frankfurter Allgemeine Zeitung 12.09.2026.
[4] Rebecca Feng, Georgi Kantchev, Summer Said: What Is Saudi-Arabia’s East-West Pipeline and Why Is It Rocking Oil Markets? wsj.com 14.09.2026.
[5] Cris Tolomia: U.S. Strategic Petroleum Reserve hits lowest level since 1982. finance.yahoo.com 15.09.2026.
[6] China’s crude oil imports fell in the second quarter. eia.gov 31.07.2026.
[7] Benoît Morenne, Collin Eaton: Oil Executives Say the Great Fuel Crisis Is Here. wsj.com 14.09.2026.
[8] Sabine Balk: Angriff auf eine „Lebensader des Welthandels“. Frankfurter Allgemeine Zeitung 12.09.2026.
[9] Benoît Morenne, Collin Eaton: ‘Refine, Baby, Refine’ Is the Energy Industry’s New Mantra. wsj.com 06.08.2026.
[10] Strait of Hormuz Factsheet. iea.org February 2026.
[11] Markus Becker, Gerald Traufetter: Staatsunternehmen sollen kurzfristig für volle Gasspeicher sorgen. spiegel.de 15.09.2026.
[12] Erste Unternehmen bereiten sich auf einen Gasmangel vor. n-tv.de 10.09.2026.
[13] Markus Becker, Gerald Traufetter: Staatsunternehmen sollen kurzfristig für volle Gasspeicher sorgen. spiegel.de 15.09.2026.
[14] Klaus Stratmann: Abhängigkeit der EU von LNG aus Russland und den USA steigt. handelsblatt.com 08.09.2026.
