Europe’s energy security is once again under strain, as renewed geopolitical tensions in the Middle East expose deep structural weaknesses in the continent’s supply system, according to a new analysis by Alpha Bank.
Central to the bank’s assessment is the strategic importance of the Vertical Corridor which is seen as a potentially critical tool in reducing the continent’s reliance on vulnerable global supply chains.
A fragile system under pressure
For the second time in five years, Europe faces a serious challenge in securing adequate energy supplies. Analysts point to the continent’s heavy reliance on imports of hydrocarbons as a key vulnerability.
Roughly one-third of global fertilizer supplies pass through the Strait, as does a similar share of helium, a byproduct of natural gas processing essential for semiconductor manufacturing. This concentration of supply flows through a single corridor underscores the risks facing European economies.
Regardless of how long the current crisis lasts, European countries are urged to accelerate efforts to reduce dependency on such routes, in much the same way they have begun to rethink defense policy in recent years.
Low gas reserves raise the stakes
Europe’s exposure to energy price volatility is further compounded by depleted natural gas reserves following a particularly harsh winter. By the end of March, storage levels stood at around 28% of total capacity — about six percentage points lower than the already weak levels recorded a year earlier.
To reach the EU’s target of 80% storage ahead of the next heating season, gas companies will need to replenish roughly half of total capacity over the summer months. Even before the latest escalation linked to the war in Iran, this goal was considered ambitious. Now, it has become significantly more complex.
Greece’s role in new supply routes
The Alpha Bank analysis stresses that Europe’s energy security strategy must become more multidimensional — not only diversifying supply sources but also strengthening the physical security of transport routes.
In this context, the Vertical Corridor has the potential to gain strategic importance, particularly when combined with the development of new routes for crude oil, natural gas and refined products into European markets.
New pipeline projects could help ease pressure points. Potential routes include connections from Saudi Arabia through Jordan and Syria, as well as expanded flows from the Caspian region into Europe. For northern countries such as the United Kingdom, maximizing domestic production in the North Sea may also form part of the solution.
At the same time, the current crisis serves as a stark reminder of the risks tied to import dependence, particularly when supply chains rely on narrow geographic bottlenecks.
Shielding households and reducing demand
In the short term, governments are urged to implement targeted support measures to cushion vulnerable households from the energy shock, including financial assistance.
However, the report cautions against broad tax cuts on natural gas, suggesting instead that reducing electricity taxes would be more effective. Such a move could lower household energy bills while making electrification technologies, such as heat pumps and electric vehicles, more affordable and without weakening incentives to curb gas consumption.
The electricity sector also offers flexibility. EU coal-fired power plants had an unused generation capacity of 568 terawatt-hours in 2024, which could be mobilized to reduce reliance on natural gas if needed.
Accelerating the clean energy transition
Over the medium term, the report calls for a faster rollout of renewable energy and nuclear power. The European Commission estimates that Europe will require €660 billion in annual clean energy investments by 2030, including funding for small modular nuclear reactors (SMRs).
Progress is already underway. Since 2022, the EU has accelerated investment in renewables, with their share in electricity generation rising to 48% in 2025. Nuclear energy accounted for 23%, while solar and wind alone reached 30% — surpassing fossil fuels for the first time.
