Cyprus energy dependence exposed amid Middle East tensions

Cyprus remains one of the most energy-dependent countries in the European Union, as authorities monitor rising geopolitical risks linked to the Middle East.

According to a Eurostat report released on Wednesday, Cyprus recorded an energy import dependency rate of 88 per cent in 2024, placing it among the highest in the EU alongside Malta and Luxembourg.

This means that the vast majority of the island’s energy needs are covered by imports, underlining its exposure to external shocks in global energy markets.

Across the EU, the overall energy import dependency rate stood at 57 per cent, indicating that nearly 60 per cent of energy consumption relied on net imports.

The data also revealed that oil and petroleum products accounted for 67 per cent of total EU energy imports, making them the dominant source of imported energy.

Natural gas followed at 24 per cent, while solid fossil fuels made up 4 per cent, electricity 3 per cent and renewable energy 2 per cent.

In terms of supply, the United States provided 16 per cent of oil and petroleum imports, while Norway accounted for 30 per cent of natural gas imports and Australia for 31 per cent of solid fossil fuels.

The heavy reliance on imported fossil fuels highlights the structural vulnerability of energy systems across Europe, particularly in countries like Cyprus with limited domestic resources.

This vulnerability is now being tested as regional tensions in the Middle East raise concerns about fuel supply and price volatility, particularly in light of developments linked to Iran.

“The situation in the Middle East and its impact on fuel and energy prices is being continuously monitored,” government spokesperson Konstantinos Letymbiotis said the day before.

He added that government decisions will depend on both domestic effects and the broader global impact and duration of the crisis.

“The latest information shows that the price of unleaded 95 gasoline in Cyprus is currently the second lowest in the European Union, while diesel ranks fourth lowest,” he said.

Despite this relative positioning, fuel prices in Cyprus have risen sharply since the beginning of March, increasing pressure on households.

Data from the Cyprus Consumers Association released earlier this week showed that the price of 95-octane petrol rose by 10.7 cents per litre between March 1-16, while diesel increased by 16.7 cents and heating oil by 13.6 cents.

Moreover, the association warned that prices are approaching or exceeding levels recorded in March 2022, when the government first introduced fuel subsidies.

It also pointed out that the consumer price index has risen from 107 units in March 2022 to 117 today, adding further strain on household budgets.

Due to the above concerns, the association called for the immediate reinstatement of fuel subsidies, arguing that the measure would have a limited impact on public finances.

The combination of high energy import dependency and geopolitical uncertainty underscores the risks facing Cyprus, as external developments continue to shape domestic fuel costs and economic conditions.