Lifting the ban on Russian oil? Many European countries are "unable to sit still" amid the energy crisis.

As the US-Iran war enters its sixth week, the soaring energy prices due to the blockade of the Strait of Hormuz are having an increasingly obvious impact on the European economy. The latest data released earlier this week by the EU statistics office shows that the eurozone's inflation rate in March rose to 2.5%, far higher than February's 1.9%. The new round of inflation "upsurge" will undoubtedly increase the cost of living for European citizens once again. Europe's heavy dependence on imported fuel makes it very vulnerable to the impact of Middle East conflicts on global energy prices. Market data shows that since the US launched an attack on Iran on February 28, European natural gas prices have risen by over 70%. EU Energy Commissioner Dan Jorgensen has warned that the chaos caused by the blockade of the strait means that fuel prices are unlikely to return to normal in the "foreseeable future." Against this backdrop, many European countries are clearly feeling a sense of urgency: Slovakia and Hungary have both stated that the EU should lift sanctions on Russian oil and gas to enhance energy security; While finance ministers from five countries including Spain, Germany, and Italy are calling for an EU-wide windfall tax on energy companies, fearing that the surge in oil and gas prices caused by the Iran war will exacerbate inflation and put pressure on households. Slovakia and Hungary call for an immediate lifting of Russian energy sanctions Slovak Prime Minister Fico stated on Saturday that the EU should end sanctions on imports of Russian oil and gas, take measures to restore "friendly" oil pipeline flows, and end the war in Ukraine to address the energy crisis stemming from the Iran war. Fico made the statement after speaking with Hungarian Prime Minister Orban. Fico said the EU should resume dialogue with Russia and ensure that member states can obtain the needed gas and oil supply from all sources, including Russia. Orban also noted that he had held talks with Slovak Prime Minister Fico on Saturday. Hungary and Slovakia are calling on Brussels to immediately lift sanctions and restrictions on Russian energy and make Ukrainian President Zelensky immediately open the "friendly" oil pipeline. In addition, they call for the immediate rejection of plans to move away from Russian energy, which are seen as more costly and harder to bear in favor of Brussels' energy policy. Currently, Hungary and Slovakia are relatively "closest" to Russia within the EU. Since the US and Israel launched attacks on Iran on February 28, international oil prices have soared. The conflict has disrupted shipping in the Gulf region and caused what the International Energy Agency (IEA) called the largest oil supply disruption in history. Central European countries, including Hungary and Slovakia, are trying to take measures to alleviate the impact of high oil prices on the public and business fuel costs. Since the outbreak of the Russia-Ukraine conflict in 2022, the EU has significantly reduced imports of Russian oil and gas. Data shows that by the fourth quarter of 2025, only 1% of the EU's oil imports will be from Russia. Hungary and Slovakia were the only two EU countries still importing Russian oil until January 27. However, since January 27, the "friendly" oil pipeline segment passing through Ukraine has been completely suspended. Ukraine attributes the interruption to attacks by Russia on Ukrainian pipeline facilities, while Hungary and Slovakia blame Ukraine for cutting off power and deliberately delaying the restart. In the statement on Saturday, Fico also said that dealing with the energy crisis at a national level alone is not enough. Finance ministers from five countries call for a windfall tax on energy companies In addition to sparking controversy within the EU over sanctions against Russia during the energy crisis, the "war profits" made by energy companies have also become a thorn in the side of many European officials. According to a letter seen by industry insiders on Saturday, finance ministers from five EU countries are collectively calling for a windfall tax on energy companies due to the rise in fuel prices caused by the Iran war. The finance ministers of Germany, Italy, Spain, Portugal, and Austria jointly called for the confirmation of the tax within the EU in a letter on Friday. They stated that such measures could help provide relief for consumers facing high energy prices and send a signal that "we are united and capable of taking action." "This would make it possible to fund temporary relief, especially for consumers, and curb the ongoing rise in inflation without imposing additional burdens on public budgets," the ministers wrote in the letter. They also pointed out, "This would also send a clear message that those profiting from the consequences of war must do their part to alleviate the burden on the public." In their letter to EU Climate Commissioner Wopke Hoekstra, the finance ministers mentioned a similar emergency tax levied in 2022 in response to high energy prices. They wrote, "Given the current market distortions and fiscal constraints, the EU Commission should quickly develop a similar tool for a collective EU contribution and build it on a solid legal basis." An EU Commission spokesperson confirmed receipt of the letter and said it is being evaluated. The spokesperson said, "More broadly, the Commission is working closely with member states to explore targeted policy measures to address the energy crisis facing Europe." The letter did not provide details on the level of windfall tax proposed by the finance ministers or which companies should be taxed. The German Fuel and Energy Association, representing refineries and gas stations, responded that the impression that companies are making undue profits is inaccurate, and there is no legitimate reason for levying a windfall tax. Earlier, EU energy officials had also said on Tuesday that they were considering reinstating energy crisis measures used in 2022, including proposals to restrict grid fees and electricity taxes. Following Russia's cut in natural gas supply, the EU introduced a series of emergency policies in 2022 including an EU-wide cap on natural gas prices, a windfall tax on energy companies, and goals to curb natural gas demand. EU Energy Commissioner Dan Jorgensen said that Brussels is particularly focused on the supply of refined petroleum products such as aviation fuel and diesel in Europe. This article is from FinSociety, edited by GMTEight: Chen Yufeng.