State aid rules as tools for handling the Middle East Crisis

Since February 2026, the situation in Iran and the wider region has escalated. The de facto closure of the Strait of Hormuz has already led to a significant increase in global market prices for oil, gas, and fertilisers, while trade disruptions are slowing down supply chains. Between 27 February 2026 and 20 March 2026, crude oil prices increased by more than 50% and natural gas prices by 85%. The European Commission aims to take swift action to protect the EU’s economy, by adopting a new State aid framework ‘The Middle East Crisis Temporary State Aid Framework — METSAF’ on 29 April 2026.

Granting aid through existing tools (e.g. the general block exemption regulation and de minimis regulations) is temporarily complemented by additional possibilities in order to provide further flexibility and higher aid intensity. Flexibility means that Member States may grant aid in a simplified manner, i.e. they may rely on relevant statistics on market prices to avoid individual tracking. In addition, it will be easier to qualify for the aid: Member States can rely on general estimates of fuel consumption in the sector, or other relevant proxies, rather than requiring beneficiaries to provide detailed proof of their actual consumption. Furthermore, measures under the METSAF will have to be notified to the Commission, however, the framework will allow for a fast approval process.

Based on the Framework, targeted support can be granted by governments to the sectors most exposed to the impact of energy price spikes and potential supply chain disruptions, namely agriculture, fisheries and transport. This means that Member States will be able to compensate up to 70% of the extra costs occurred at the beneficiaries due to the price increase of fuel and fertilizer, and increased aid intensity can be granted (up to 70%) to electricity price relief schemes approved under the ’Clean Industrial Deal State Aid Framework — CISAF’ covering the electricity cost of the eligible consumption. Member States may consider temporary reductions in fuel excise duties as well.

State aid rules could serve as a band-aid solution, but the question is how to achieve long term competitiveness. Other actions of the EU such as reducing fossil fuel dependency and driving investments toward renewables and nuclear power plays a major role in this journey.