Skyrocketing electricity and energy prices in Europe – concerns are spreading to Sweden

The war in Ukraine and the crisis in the Strait of Hormuz have once again caused electricity and energy prices on the continent to soar. At the same time, new moves from the White House to throttle oil exports to Europe are causing concern.

This weekend, EU Energy Commissioner Dan Jørgensen sent a letter to all member states urging them to immediately reduce demand for gas and electricity "as long as necessary".

With "limited global supply and high price volatility, reduced demand can be an effective tool to hold prices down", writes Jørgensen.

The background is that the EU's gas stocks have reached historically low levels and are currently only filled to 68 percent. The EU's target is 90 percent.

The situation on the oil market is just as tense. On Monday, the EU's oil coordination group met to analyze the consequences of a possible American export freeze. This could mean that prices at the pump skyrocket, but also endanger Europe's defense capabilities.

NATO Secretary General Mark Rutte raises a warning finger for the closure of European oil refineries, in a situation where several security services warn of a Russian escalation of the hybrid war.

- If war breaks out and the Russians attack us, we will need huge amounts of diesel and oil products for our fighter planes and tanks. This is a big concern, says Rutte to Bloomberg.

So far, Sweden stands out in Europe with comparatively low electricity prices and cheap fuel at the pump. But the situation can change quickly.

The low price of petrol and diesel is largely due to Sweden receiving a temporary exemption from the EU's rules to lower the fuel tax to the Union's minimum level. The exemption expires later this fall. If it is not extended, the price at the pump is expected to rise by several kroner.

At the same time, Sweden has a strong and largely fossil-free own electricity production, where hydro, nuclear and wind power heat Swedish homes and supply industry with relatively cheap electricity. But since the Swedish electricity system is interconnected with the continent, rampant gas and electricity prices in Europe can result in high prices here as well.