In an interview with DW News, Christof Rühl, Global Advisor at Crystol Energy, discussed Europe’s response to rising oil and gas prices amid the war involving Iran. He explained that while the European Union is facing a serious supply shock, today’s crisis differs from both the pandemic and the fallout from Russia’s invasion of Ukraine. His analysis focused on how governments can manage demand, the role of strategic reserves, and why markets remain highly sensitive to further disruption.
Key takeaways:
Price signals remain the most efficient way to reduce demand, while restrictive measures are often uneven and hard to sustain.
Europe has used market based demand reduction before, with higher prices curbing demand and governments supporting consumers through transfers.
Today’s price increases are serious, but they remain well below the levels seen during the 2022 to 2023 gas crisis.
The European Union remains highly dependent on imported oil, even when supply from Norway and the United Kingdom is considered.
Strategic reserves still provide an important short term buffer that could help Europe manage the coming months.
This crisis is different from earlier shocks because it reflects a physical supply disruption rather than weak demand or a reshuffling of trade.
The main risk is further escalation that could damage ships, production sites, or export infrastructure.
A prolonged conflict would keep markets on edge because uncertainty itself is adding pressure.
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