A Falling Oil Price Is The Most Dangerous Moment For Europe's Energy Security

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The most dangerous number for Europe's energy security this month is not a high oil price. It is a falling one.

By June 25, with tankers again moving through the Strait of Hormuz and Brent slipping below $73 a barrel, the market had almost filed the shock away. The relief is real. The danger sits inside it. Each time the price comes back down, Europe forgets what the spike was trying to say.

What it was trying to say is that imported energy carries a premium that never arrives as a line item. Europe pays for security twice. Once at the dock, in the price of every cargo that moves through someone else's water. Then again later, because the panic fades before anything gets built.

The accounting runs backwards. A grid, a cable, a battery is booked as a cost, visible and dated and easy to cut in a lean year. The exposure that comes from importing fuel through contested chokepoints is treated as weather, an external shock no one put on the balance sheet. So the import path always looks cheaper.

This is a failure of measurement as much as politics. When Europe prices the move off imported fuel, the costs are direct and arrive on schedule, so the project looks expensive. When it prices the model it already runs on, the costs are indirect. They show up as geopolitical and political risk, the kind our metrics do not question, even as the shocks that trigger them grow more common. Put both on the same page and the comparison turns over.

The bill the market never sends

The size of the premium is not a guess. In 2022, the first full year of the energy war, the EU's energy import bill peaked near €604 billion, with the gas bill alone close to €400 billion, more than three times the year before. By 2024 the bill had receded, to around €427 billion. That is the part most people miss. The bad year was not a one-off accident. The bill is structural, and it is still being paid every year.

Money on that scale does not disappear. It is spent on the problem annually instead of solving it once.

Arnoldas Pikžirnis put the comparison to me directly in Vilnius. He was Lithuania's vice-minister for energy until last year, and worked on national security before that. "If you look at how much the European consumers have overpaid due to Hormuz prices," he said, "if you would have the same amount invested into European networks, you would have an absolutely different reality here."

When I put the measurement problem to him, he did not hedge. "It's not cheaper," he said. "It's not cheaper." He meant the long run as much as the spike. On the path Europe is on, he argued, home heating of the kind Britain relies on becomes one of the biggest costs a society will carry over the next ten to twenty years, not a saving deferred.

The argument has an honest limit, and it is worth saying before a critic says it. Building your own power system does not end dependence. It moves part of it into minerals, batteries, inverters, transformers, finance and the permits to put any of it in the ground, much of which still runs through China. What changes is the kind of dependence. A supply chain can be diversified and reworked over years. A strait that someone decides to mine cannot be negotiated with on a winter morning.

Lithuania ran the experiment

Lithuania is worth listening to because it already paid to find out.

For decades the Baltic grid ran on a Soviet-era system synchronized through Russia and Belarus. In February 2025, after a decade of work and more than €1.2 billion in EU support, Lithuania, Latvia and Estonia cut the cord and synchronized with continental Europe. Pikžirnis described the result in one line. "You can't be turned off by a switch in Moscow," he said. "You could two years ago."

The country had already, in 2022, become the first EU state to stop importing Russian gas, oil and electricity, leaning on the Klaipeda LNG terminal it built in 2014 over objections that it was too big and too expensive. The terminal now supplies its neighbors. The expensive decision reads, in hindsight, like an insurance policy that paid out.

The threat did not disappear. It moved under water. Around Christmas 2024 the Estlink 2 cable between Finland and Estonia went down after a shadow-fleet tanker, the Eagle S, dragged its anchor across the seabed. Whether a court ever proves intent matters less than the lesson every European grid operator took from it. Undersea infrastructure is far cheaper to threaten than to repair.

The bottleneck is the grid

Pikžirnis's sharpest point was not about the past. Looking 10 to 15 years out, he said, "the biggest issue that we'll all face is the grid." That is the sentence a boardroom should keep.

Europe has spent three years arguing about molecules: Russian gas out, American and Qatari LNG in, Norwegian pipelines, Caspian routes. Molecules still matter. The harder constraint now is electrons, moving power across borders and protecting it once it flows.

There is a date to watch. The Baltic-German PowerLink, a roughly two-gigawatt subsea connection between Lithuania, Latvia and Germany, is in front of the European Commission, with a decision on its next phase expected by the end of 2026. It is exactly the kind of project that looks expensive while the strait is open and obvious the moment it closes. That timing gap is the real adversary. After every shock Europe briefly understands that energy security is physical. Then the price falls, and the understanding falls with it.

Pikžirnis has watched the cycle. "Usually the memory of the lessons learned remains for one year, maximum one and a half," he said.

That clock is running now. Hormuz is reopening, Brent is sliding, and the case for building is already getting quieter. The premium is not going anywhere. It is only leaving the front page, until the next strait, the next cable, or the next cold week turns infrastructure back into strategy.

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