When tensions around the Strait of Hormuz began to hit energy markets again, the reaction was entirely predictable. Tanker traffic slowed, insurance prices rose, and oil and gas prices began to rise. But something else happened as expected.
Across Europe, politicians and policymakers began reviving familiar proposals: reopening gas fields, expanding offshore drilling, rethinking domestic reserves that had previously been depleted. In the Netherlands, even the long-closed Groningen gas field has emerged cautiously in policy debates, with institutions such as TNO suggesting that it might serve as a strategic backup if disruptions escalate.
Across the North Sea, many former UK energy ministers were quick to argue that Britain should speed up new exploration to protect itself from volatile global markets. If this answer sounds familiar, it should. We have seen this movie before. And the ending never really changes.
The crisis that repeats
In a recent column, I argued that Europe’s vulnerability to fossil fuel disruptions across geopolitical hotspots such as the Strait of Hormuz was never hidden. Almost one-fifth of the world’s oil trade passes through this narrow corridor. When tensions rise there, global energy markets react.
What is remarkable is that chaos ensued. That’s how quickly the policy conversation comes back to the same reflection: more drilling and exploration. And sometimes I was right because it didn’t bring us any value.
Groening Mirage
Consider the new debate about the Groningen gas field in the Netherlands. For decades, Groningen was one of Europe’s largest gas reserves, powering the Dutch economy and supplying much of northwestern Europe. But after years of earthquakes associated with mining, the site was closed and politically radioactive. Until, of course, prices go up.
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Now the idea is sometimes raised that Groningen can act as a strategic reserve to stabilize markets during a crisis. Or even be allowed to open again to stabilize prices in the same situation as we are now. The problem is that energy economics does not support this narrative.
Michel Mulder, a professor of energy economics, pointed out that in Europe’s liberalized gas markets, changes in supply-side concentration – such as adjusting output from large fields – had limited influence on gas price movements. Europe operates in an integrated gas market where prices are largely determined by global supply and demand rather than a single area’s production. Even if Groningen reopens tomorrow, gas will still be sold at European market prices.
Molecules may come from Dutch soil. The price will still come from the international market. In other words, reopening Groningen may produce gas. It won’t magically lower anyone’s heating bill.
North Sea Reflections
The same logic applies to the renewed enthusiasm for drilling in the North Sea. In the UK, former energy ministers have argued that expanding offshore production will protect the UK from global price volatility. Similar arguments are made in the Netherlands.
But new offshore fields can take years, often a decade, to reach meaningful production. And when they do, oil and gas will then Still sold in international markets. This is also only a part of the total European gas demand.
Domestic production does not insulate countries from international commodity prices. It simply determines where the fuel is extracted, not what consumers end up paying for. If anything, massive new fossil investments risk locking Europe’s volatile oil markets precisely when policymakers claim they want more stability.
A system built for instability
What the Hormuz chaos really highlights is not a temporary imbalance but a structural feature of fossil fuel systems. Oil and gas resources are geographically concentrated. Supply chains stretch across oceans. Major transport routes become impenetrable bottlenecks.
When geopolitics interfere in these ways, prices move everywhere. Europe cannot control the politics of the Middle East. It cannot guarantee free passage through strategic waters. And it can’t stabilize global commodity markets by drilling a few extra wells closer to home.
An energy system that avoids this problem
However, there are energy systems that are much less vulnerable to these shocks. It runs mainly on renewable electricity. Wind turbines in the North Sea do not pass through the Strait of Hormuz. Solar panels are not related to tanker insurance rates. Electricity produced domestically from renewable sources is spread over the geography of production rather than being concentrated in a few politically sensitive areas.
Even in economic terms, the difference in resistance is significant. Analyzes by organizations like TNO show that supply disruptions affecting fossil fuels have dramatically smaller impacts, sometimes around ninety percent less, on renewable energy systems, precisely because they do not rely on constant imported fuel. When fossil markets are panicking, wind and solar remain remarkably calm.
Stabilize the present, build the future
None of this overlooks short-term energy security concerns. Europe still relies heavily on natural gas for heat, industry and the balance of electricity. Maintaining supplies through diversified LNG imports, particularly from the United States and other reliable suppliers, is a reasonable way to manage current constraints.
But short-term stability should not be confused with long-term strategy. Expanding fossil fuel infrastructure in response to short-term prices runs the risk that economies will continue to experience the decades of extreme volatility that led to the crisis.
The structural solution lies elsewhere: electrification, renewable generation, storage systems, and robust power grids. This investment reduces dependence on imported oil altogether rather than effectively managing its own risks.
A European lesson that continues to learn
The Strait of Hormuz crisis did not create European energy losses. It just reminds us that it exists. And yet every time this reminder comes up, it’s absolutely amazing that the policy debate starts again from the same place: exercise more, extract more, import less.
This is a story of comfort. Unfortunately, this is also wrong. Europe cannot eliminate geopolitical risk from global energy markets. What it can do is underestimate how important these markets are to its economy.
This was the strategic rationale behind accelerating the energy transition after previous crises. If the current Hormuz mess proves anything, it’s that the argument was never about climate. It was always about security.
And the next time someone proposes drilling our way out of global energy instability, it might ask a simple question: If it really worked, wouldn’t it work by now?
By Leon Steele for Oilprice.com
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