European governments are implementing a range of measures to mitigate the impact of soaring energy prices driven by conflicts in the Middle East and Ukraine, according to a recent report by the Organization for Economic Cooperation and Development (OECD). These price hikes have sparked concern among citizens and prompted policy actions across the European Union.

The disruptions began with tensions in Iran and were exacerbated by Russia’s ongoing war in Ukraine, which unsettled global energy supplies. The European Union relies heavily on imports for its energy needs, sourcing nearly all of its oil and approximately 85% of its natural gas externally. Overall, imported energy accounts for 57% of the bloc’s consumption, with the remainder coming primarily from renewables and nuclear power.

The energy crisis has led to gasoline and diesel prices exceeding $12 per gallon equivalent in some countries, resulting in an estimated additional daily expenditure of 203 million euros ($231 million) on diesel alone by EU consumers, according to the advocacy group Transport & Environment.

Governments in several EU states have introduced diverse policy responses. Lithuania has halved train ticket prices, while Greece has increased taxes on gambling to fund relief programs. Italy has postponed the shutdown of certain coal power plants and eased administrative requirements for oil and gas projects. The Netherlands expanded free energy-saving home services, and Poland proposed significant taxes on fuel producers earning windfall profits.

At the EU level, leaders in Brussels have granted member states temporary flexibility to provide state aid to households and energy-intensive sectors such as agriculture, transportation, and fisheries. The European Commission has also relaxed spending rules to allow investments aimed at enhancing energy security and reducing dependence on imported fossil fuels.

In France, the government announced a 450-million-euro ($512 million) relief package expanding direct aid to workers who commute long distances and extending subsidies for farmers, fishermen, and construction companies through the end of the year. The package also accelerates distribution of energy vouchers to help millions of families cover heating costs during winter. President Emmanuel Macron has urged the European Commission to ease EU fuel quality standards to increase diesel and kerosene production and has called for raising the biodiesel content limit in diesel fuel from 7% to 10%.

Macron also committed to deploying French forces and defensive equipment to Saudi Arabia to protect strategic energy infrastructure, citing recent territorial advances by Iran-backed Houthi rebels near the Bab al-Mandab strait, a critical chokepoint in global trade.

Germany renewed temporary fuel tax reductions effective October 1 through the year’s end, cutting prices by 17 cents per liter, with an estimated cost of 2.5 billion euros. The government plans discussions with the oil industry about implementing a fuel price cap by January, following precedents in Belgium and Luxembourg. Similarly, Spain extended tax cuts on gasoline and diesel, originally introduced in March, as part of a broader 5-billion-euro ($5.7 billion) support package. These measures include escalating tax reductions if fuel-price inflation surpasses 15% year-on-year and continue subsidies for sectors heavily dependent on fuel.

EU countries have also tapped strategic oil reserves under an agreement with the International Energy Agency to release 400 million barrels to the market. France is advocating for G7 countries to increase such releases.

Efforts to reduce dependence on Russian energy continue, focusing on expanding renewable energy and electrification, which the European Commission projects could lower the EU’s annual fossil fuel import bill by 260 billion euros ($296.6 billion) by 2040. The bloc has simultaneously increased reliance on U.S. energy supplies, formalizing a $750 billion purchase agreement concluded in 2025.

However, recent U.S. proposals to ban diesel exports to curb domestic prices have raised concerns in Europe. The European Commission has criticized the idea, warning it could disrupt the mutually beneficial energy cooperation between the EU and the United States and negatively affect both economies.