How the Iran Crisis Is Reshaping European Energy Prices

A conflict far from Germany can still affect your energy costs at home. The reason is simple: oil and gas markets are global. When supply is disrupted or shipping routes become risky, wholesale energy prices often rise first, and electricity costs may follow later.

A quick summary

1. Supply shock: War and disrupted shipping unsettle global oil and gas markets.
2. Gas prices rise: Europe buys a lot of gas on the global market.
3. Power prices rise: In Europe, gas-fired power plants often set the electricity price.

What happened

At the end of February, the United States and Israel struck targets in Iran. Iran responded militarily. Soon after, risks also rose around key shipping routes in the Middle East.

Why this matters: The Strait of Hormuz carries around 25% of world seaborne oil trade and 19% of global LNG trade. If conflict disrupts traffic there, or even raises the risk of closure, markets react quickly and prices can increase. (Source: IEA)

What happened in energy markets

Oil rose sharply after the escalation began. You will often see the term Brent here. Brent is one of the main global benchmark prices for crude oil.

European gas prices also surged sharply. The TTF, Europe's most important benchmark gas price, jumped by around 35% on the first trading day after the attacks began, eventually rising from around €32/MWh before the conflict to over €60/MWh in early March, as traders priced in tighter supply and higher risks.

For most customers, what matters is not the exact peak on a single day, but the overall trend. And that trend was clear: oil prices jumped, gas prices rose significantly, and electricity prices became more volatile.

Why gas can push up everyone’s power price

Electricity in Europe is priced through the merit order system. Power comes from different sources like wind, solar, coal and gas, and they are dispatched in order of cost, from cheapest to most expensive. The price for all electricity is set by the most expensive power plant needed to meet demand. This is called the clearing price.

If that last plant is often gas-fired, expensive gas can lift the price for the whole market. That is why households can be affected even if they do not heat with gas.

What this means for my bill

Not every wholesale price spike shows up immediately on every electricity bill.

• Who may feel it now: people filling up their car, signing a new power contract, or using a dynamic tariff.
• Who may feel it later or not directly: households already on a fixed tariff. Suppliers buy electricity volumes at fixed prices before actual delivery, for example for the full period of a fixed-price contract. Because of this lag between purchasing and delivery, wholesale price swings only pass through once the current contract expires, if at all.
• Important: a wholesale market price is not the same as a household tariff. Your bill also includes grid fees, taxes, levies, and supplier costs.

In Germany, grid fees (Netzentgelte) are fees for using and maintaining the electricity grid. They are a separate part of the bill from the wholesale power price.

How dynamic tariffs change the picture

With a dynamic tariff, your price tracks the EPEX Spot day-ahead market which is tomorrow’s hourly wholesale rates instead of a fixed per-kWh rate. That means you can shift flexible loads like your dishwasher, washing machine, or EV charging into cheaper hours and capture real savings, while a fixed tariff simply smooths out the volatility for you.

Bottom line

The situation highlights how dependent Europe still is on global oil and gas markets. As long as gas plays a key role in electricity pricing, global conflicts can affect energy costs at home.

The long-term answer is clear: expanding renewable energy like wind and solar can reduce this dependency and make prices more stable.

Sources

• World faces largest-ever oil supply disruption on Middle East war, IEA says (Reuters, 12 Mar 2026) — Iran conflict, Strait of Hormuz, oil supply shock
• Latest energy shock reminds Europe of its risky gas reliance (Ember, Mar 2026) — TTF surge, gas-fired power costs, renewables as buffer
• Iran-Krieg: Angst vor neuer Energiekrise (FAZ, 3. März 2026) — Gaspreise, Gasspeicher, Stromkosten in Deutschland
• Der Iran-Krieg offenbart Deutschlands Strompreis-Falle (Handelsblatt) — Merit-Order, Großhandelspreise, Strompreisstruktur
• Dutch TTF Natural Gas Futures Historical Data (Investing.com) — TTF price data, Feb–Mar 2026 (pre-conflict ~€32/MWh, peak ~€70/MWh)
• European gas price jumps near €70/MWh as Iran war enters second week (S&P Global, 9 Mar 2026) — TTF +29% intraday on Mar 9
• How will the Iran conflict hit European energy markets? (Bruegel, Mar 2026) — Gas +20% on Mar 2, day of first strikes