The European Commission on Monday proposed loosening state aid rules to allow member states to increase financial support for businesses hit by surging fuel and fertiliser costs, as the Iran war drives energy prices higher.
Oil prices climbed about 6% to above $100 per barrel after the United States announced a blockade on ships leaving Iran’s ports, intensifying concerns over prolonged supply disruptions.
Brussels said the revised framework would enable governments to compensate companies for part of the price increases compared to levels before the conflict began on February 28.
Sectors expected to benefit include agriculture, road transport and shipping, all of which are highly exposed to fuel cost volatility.
The draft measures also propose raising the cap on aid for energy-intensive industries to above 50% of their power bills.
Several countries, including Germany, Italy, Poland and Hungary, have already rolled out national measures such as fuel tax cuts and price caps to shield consumers and firms.
The Commission said the changes would be temporary and targeted specifically at mitigating the economic fallout from the war.
EU governments are set to review the proposals and provide feedback before a final version is adopted later this month.
The move reflects growing urgency among policymakers to stabilise economies facing sharp cost pressures from disrupted energy markets.
As with all such measures, the Commission will continue to oversee state aid to ensure fair competition across the EU single market.