EU faces energy, trade strains as oil prices surge and internal divisions deepen
The European Union is navigating energy, trade, and political strains as oil prices surge and internal divisions persist. Brent crude hovered above $104 on Friday, down slightly from a recent spike, with the Strait of Hormuz effectively closed since March, cutting off a key oil and LNG route. Saudi output fell by 1.9 million barrels per day in August, and the U.S. Energy Information Administration does not expect Middle East production to recover to pre-conflict levels until mid-2027. Despite these pressures, the EU’s economy has shown resilience, with the European Commission revising its 2026 growth forecast down to 1.1 percent in May, from 1.5 percent, while unemployment remains around 6 percent .
The bloc’s energy efficiency gains have helped cushion the impact. Since 1995, the EU has reduced energy use per euro of output by 44 percent, with over a third of that improvement achieved since 2019. Between 1990 and 2024, the EU grew its economy by more than 70 percent while cutting net greenhouse gas emissions by 40 percent. Primary energy consumption fell 9.6 percent in the decade to 2024, with Germany seeing a 21 percent drop .
Trade tensions add to the challenges. The European Commission seeks to accelerate trade deal ratification by circulating English-only versions for approval, a move opposed by France. Trade chief Maroš Šefčovič told EU ministers in February that delays in ratifying deals like the EU-Mercosur agreement had cost the bloc an estimated €300 billion in GDP and €200 billion in export opportunities since 2021. The Commission confirmed it would test the English-only approach with the recently concluded EU-India trade deal, though France insists on defending the use of all EU languages .
Political fragmentation in Central Europe further complicates the EU’s cohesion. Despite economic growth and EU-NATO membership benefits, the Visegrád Four countries face social disillusionment, polarization, and anti-EU backlash, with some seeking closer ties with Russia or China .
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