Iran oil shock: the EU has very few options to limit the war’s economic impact – and prevent a recession

Iran has effectively shut the Strait of Hormuz, one of the world's most important oil export ​routes. Aomkanae sawatdinak/Shutterstock

After the US and Israel began their military strikes on Iran on February 28, oil and gas markets were plunged into chaos and energy prices shot up. As of today, Brent Crude Oil prices are 20% higher than in late February. They went from around $70 a barrel in late February to quickly surpassing $100, before falling to around $90 on March 10. The main reason for the fall was Donald Trump’s market-calming announcement that the war will end “very soon”.

The fall in oil prices is reminiscent of events that followed the April 2025 “Liberation Day” tariffs. After the announcement, stock markets plummeted, but when Trump paused the tariffs just days later, the stock market responded by rising again – just as oil prices have fallen in response to his reassurances about the war ending.