European consumers are once again exposed to a significant “geopolitical premium” at the pump, with oil prices surpassing $100 a barrel and T&E research projecting an extra €150 million daily in fuel costs.
The analysis draws parallels to 2022, when Europeans paid an additional €55 billion in aggregate as global crude climbed past the $100 mark, highlighting the persistent economic vulnerability tied to imported fossil fuels.
Data from mid-2022 illustrates the scale of the impact. Diesel prices jumped 45 percent and petrol rose 36 percent across the EU, pushing fuel costs above €2 per liter in many regions. Filling a 50-liter tank became €24 to €31 more expensive than pre-crisis levels, despite governments implementing temporary fuel duty cuts that cost taxpayers around €30 billion. While these measures provided short-term relief, they failed to structurally reduce reliance on oil or shield European economies from recurring price shocks.
T&E senior director Antony Froggatt emphasizes that the premium is inherently tied to Europe’s dependency on imported oil, which amplifies exposure to global market volatility and geopolitical tensions. He points to Russia and Saudi Arabia as actors whose influence underscores the need for Europe to pivot to domestically generated renewable energy and electrification measures such as EVs and heat pumps. “One thing they don’t control is the wind and sun. Europe must now prioritize renewable energy and electrification to ensure this never happens again,” Froggatt said.
Electric vehicles have already demonstrated measurable impact. With 7.7 million EVs on European roads, oil consumption has decreased by 126,000 barrels per day, translating to roughly €39 million in daily savings at 2022 fuel prices. T&E notes that the €136 billion in total fossil fuel subsidies provided in 2022, €107 billion of which went to oil and gas consumers, could have financed approximately 5.4 million affordable EVs at €25,000 each. Such a deployment would have cut crude oil imports by 70,000 barrels daily and saved €2.5 billion annually.
The fossil fuel sector continues to benefit from high prices, with EU oil and gas companies earning €104 billion in profits in 2022, a 45 percent increase from 2021. Although the EU implemented an energy windfall profits regulation in 2022 and 2023 to claw back some of these gains, the measure has now lapsed. T&E warns that Europe must be prepared to reinstate such policies if elevated energy prices persist, ensuring that excess profits are not perpetually captured by fossil fuel producers at the expense of consumers.
