The distributional impact of the energy price shock following the 2026 war in the Middle East

Paola De Agostini (), Kajetan Trzcinski (), David Klenert (), Antonio F Amores (), Luis Pedauga (), Matthias Weitzel, Valeria Ferreira (), Rafael Garaffa (), Nicolas Kreitmair (), Simone Pieralli (), Spire Arsov () and Christian Elleby ()
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Paola De Agostini: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Kajetan Trzcinski: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
David Klenert: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Antonio F Amores: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Luis Pedauga: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Valeria Ferreira: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Rafael Garaffa: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Nicolas Kreitmair: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Simone Pieralli: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Spire Arsov: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Christian Elleby: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en

No JRC147531, JRC Research Reports from Joint Research Centre

Abstract: This note examines how a prolonged energy price shock following the conflict in the Middle East could affect EU households across the income distribution. It extends our previous analysis of the most recent inflation surge, which focused on the immediate effect of higher transport fuel prices (De Agostini et al., 2026), by considering the wider price pressures likely to emerge over the coming months as rising fuel costs pass through to electricity, heating, food, and other goods, particularly if oil and gas prices remain elevated beyond the official forecast. To do so, we bring together, for the first time, four models in a single framework: building on the scenarios of the European Commission Global Multicountry (GM) model, we translate its EU-wide estimates into detailed sectoral price changes using FIDELIO and JRC-GEM-E3 / AGLINK-COSIMO, and feed these price changes into EUROMOD to trace their effect on household budgets. The results show that the price shock is regressive: lower income households face higher price increases and devote a larger share of their income to the goods most affected, so the burden falls disproportionately on them, and more so the longer the shock persists. While the note presents results at population-weighted EU averages, it is important to notice that impacts at Member State level can differ significantly depending on national consumption and energy patterns.

Date: 2026-07
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