Stocks sank again.
Did something happen again?
According to Radio Canada International (RCI), on the 12th day of the U.S.–Iran war, at least three ships were attacked in the Strait of Hormuz.
Wasn’t the United States supposed to escort ships?
Where are they?
If the situation gets out of control and oil prices keep rising, the 2022 European energy crisis could repeat itself. The global economy may suffer, inflation in the United States could rise again, and hopes for rate cuts might disappear.
No surprise that the market is getting nervous again.
1. Looking Back at the 2022 Energy Crisis
Europe’s energy system has always been relatively fragile.
Before 2022, Europe pushed hard for an energy transition. To reduce coal and other fossil fuels, many countries imported cheap natural gas from Russia to replace coal and then gradually moved toward renewable energy like solar and hydropower. This was part of the European Union’s long-term strategy.
But when the Russia–Ukraine War began, Europe realized the problem was more complicated.
In March 2022, the European Union launched the REPowerEU Plan, aiming to strengthen energy independence and security. The EU increased imports from non-Russian sources and set new targets by 2030:
- 480 GW of wind power
- 420 GW of solar capacity
The goal was to reduce energy risks.
2. Europe is better prepared this time.
There are two main reasons why EURUSD dropped sharply.
First, Iran attacked the largest gas facility owned by QatarEnergy, so Qatar had to temporarily stop production of natural gas and related products.
Europe is usually the first to feel the impact of energy prices. However, this situation is different from 2022.
During the Russia-Ukraine conflict, Europe and Russia essentially stopped doing business. But this time is different. The facilities can be repaired. Trade has not completely stopped.
The second reason why EURUSD sank is Iran declared to “close” the Strait of Hormuz. However, the Strait of Hormuz is an international waterway. No single country has the legal right to “close” it. Iran has threatened to block the strait, but I doubt whether Iran has the ability to do it.
The International Energy Agency and its 32 member countries agreed to release 400 million barrels of strategic oil reserves. The release could take about 120 days and is meant to stabilize the global energy market.
This also means Donald Trump has strong political incentives to prevent oil prices from soaring. After all, high fuel prices are never good for voters.
At the same time, Europe has greatly increased investment in solar energy after the 2022 crisis.
According to the SolarPower Europe report EU Solar Market Outlook, by June 2025, solar power had become the largest electricity source in the EU, accounting for 22.1% of total power generation.
Under the REPowerEU Plan, total solar capacity in Europe is expected to exceed 600 GW by 2030.
In other words, even if energy prices rise again, the situation today is not the same as in 2022.
3. Panic Often Creates Trading Opportunities
History shows that when energy prices spike sharply, they usually fall back later.
That means there may be opportunities to short oil and natural gas.
From a technical perspective, the daily chart of crude oil shows a clear pattern. Whenever the RSI rises above 70, prices often start to decline afterward. Energy prices can surge quickly due to emotions, but once panic fades, prices tend to pull back. We cannot predict sudden spikes in advance because no one can see the future. But we can watch for opportunities after the spike, when the market begins to calm down.
That is when short positions in oil and natural gas may appear.
At the same time, EURUSD has dropped because of panic about a possible repeat of the 2022 energy crisis, but as we just explained, today’s situation is very different.
If the market eventually realizes that Europe’s ability to handle the shock is stronger than expected, the euro could recover, and EURUSD may rebound from its recent lows.