This is a guest post by Camilo Sánchez, a communications strategist working for Greenpeace International. We are living through a cost of living crisis that is being treated as if it were a mysterious, purely ‘economic’ event, when in reality it has a clear, combustible cause: our dependence on coal, oil and gas. Across the United States, Europe and far beyond, the main driver of recent price surges has not been wages or ‘too much money’ in the system, but repeated fossil fuel shocks feeding into everything from electricity bills to food prices. When we talk about inflation today, in many countries we are mostly talking about fossilflation, a price spiral rooted in the fossil fuel system itself. War, chokepoints and the human cost of fossilflation The US‑Israeli war on Iran is first and foremost a human catastrophe, with thousands of lives lost, families displaced and communities facing bombing, blackouts and water cuts across Iran and the wider Middle East. Those impacts are compounded by the environmental devastation of burning refineries, major oil spills, leaking pipelines and militarised shipping lanes, whose toxic fallout will last far beyond the nightly news cycle. At the same time, the decision to wage war in a region that carried a substantial share of the world’s oil and LNG has triggered what the International Energy Agency calls the worst energy crisis since the 1970s, sending fuel, food and transport prices soaring. The closure and repeated disruption of the Strait of Hormuz, which controls around a fifth of global oil and gas shipping, has shown again how easily a single chokepoint can turn into a global economic weapon. Another fossil fuel chokepoint, the Bab al‑Mandeb strait, has become a flashpoint in a connected war over Red Sea shipping and Yemen, against the backdrop of the same energy shock. This strategically located transit route has enabled Saudi Arabia to boost its oil revenue during the crisis, even as missile threats and blockade politics deepen a humanitarian emergency and ripple into higher bills far from the frontline. As long as our energy system relies on oil and gas flowing through war‑prone chokepoints, war anywhere becomes a crisis everywhere. The US‑Israeli war on Iran is not an isolated episode. Russia’s full‑scale invasion of Ukraine, earlier energy crises and repeated OPEC (Organization of the Petroleum Exporting Countries) supply squeezes have all followed a familiar pattern, fossil fuel prices surge, inflation jumps, whiteland households are left to absorb the shock through higher bills. Each time, governments and central banks talk about ‘temporary energy noise’, but the reality is that every fossil shock leaves a permanent mark on the price level, pushing people deeper into hardship even after headline inflation starts to fall again. Governments are bailing out fossil fuels, not people August 06 2023, Canada, Alberta. Tar Sand Processing in Alberta near Fort McMurray. © Markus Mauthe / Greenpeace Since fossilflation is driven by oil and gas, governments must cut down their countries’ dependence on fossil fuels as a response to energy shocks. But this is not what we are seeing. An analysis of seven EU countries’ responses to the US‑Israeli war on Iran shows that most emergency packages have been designed to protect fossil fuel consumption rather than to cut dependence on it. Across Europe, roughly 86% of crisis spending by governments is encouraging more fossil fuel use through fuel tax cuts, broad VAT reductions on energy (cutting sales tax on everyone’s gas and electricity bills) and untargeted subsidies (direct payments or price supports for fossil fuel costs for all consumers rather than prioritising support for the most vulnerable households. Spain, Germany, and Ireland have spent the most on broad fossil fuel bailouts by cutting fuel taxes across the board. This brings prices down for now, but keeps these countries hooked on imported oil and gas. The Spanish government’s energy relief €5 billion package is a mixed bag: it includes protection for people against rising energy costs and measures towards shifting to renewables but also a massive tax break for heavy industry, making it one of Europe’s strongest renewable energy commitments and one of its biggest fossil fuel lock-ins, at the same time. Despite its bold climate rhetoric, Germany’s actual response to the energy price shock has been almost entirely fuel tax cuts and price caps, nothing that meaningfully reduces its fossil fuel dependence. The Netherlands and Sweden have done better, putting more money into things like energy-efficient homes, heat pump incentives, and cheaper public transport. But even they still spend heavily on fossil fuel subsidies. Overall, none of these seven EU countries has a plan that actually ends fossil fuel dependence, all are allocating more to fossil fuel bailouts than to structural solutions. Such measures make fossil fuels cheaper to keep using, rather than helping people use less of them which is not only inconsistent with climate goals, it also deepens inequality. Broad tax cuts and general fuel untargeted subsidies tend to benefit higher‑income households and sectors with high fossil consumption, while leaving the poorest communities with only partial relief and no long‑term protection. Only a small share of the government spending is going towards reducing fossil fuel for good, or speeding up the transition to renewables. Instead of using limited public budgets to insulate buildings, expand clean public transport, support agroecology and tax windfall fossil profits, many governments are effectively writing cheques to the fossil fuel industry, hoping that temporary discounts will buy social peace. Fossilflation, inequality and peace Fossilflation is not just a technical issue for central bankers, it is a justice and peace issue. Every time oil and gas prices surge, it is ordinary households, especially in low‑income communities on the frontlines of climate impacts, that pay the price through rising bills and reduced public services. In the first 50 days of the US‑Israeli war on Iran, an estimated 150 billion dollars moved from households to oil and gas companies through higher energy prices alone, while governments worldwide are on track to spend around 1.1 trillion US dollars propping up the fossil fuel industry in 2026. Meanwhile, the social and environmental costs of fossilflation are enormous too. Air pollution from burning coal, oil and gas is linked to roughly 8.7 million premature deaths a year worldwide, and climate‑driven disasters such as floods and heatwaves add hundreds of millions of euros to energy bills in countries like France and Germany on top of lives lost. When governments choose to preserve fossil fuel profits and military alliances over people’s wellbeing, they are effectively trading peace and stability for an economy built on volatile, violent energy sources. May 01 2002, Germany, Ingolstadt. Esso Refinery. © Jens Küsters / Greenpeace Dependence on fossil fuel chokepoints such as Hormuz and Bab al‑Mandeb also undermines peace directly. It gives armed actors leverage over global energy prices, incentivises military protection of shipping lanes, and turns entire regions into geopolitical battlegrounds where civilians pay in parts: first through war and destruction, then through the economic fallout and ultimately, through more extreme weather. Breaking this dependence is therefore imperative not only to the climate imperative but also to peace. The way out: decentralised renewables and a fair response to fossilflation August 16 2023, Indonesia, Jakarta. Electric Bus in Jakarta.© Jurnasyanto Sukarno / Greenpeace The evidence from the US, Europe and conflict zones points to a clear conclusion: tackling fossilflation means ending our dependence on oil and gas. There is no shortage of sunlight or wind threatening our energy security, what keeps our societies vulnerable is the decision to stick with fuels whose price and supply can be disrupted at any moment by Trump’s mood, a pipeline explosion or a war. A coherent response needs four pillars. Decentralised, price‑stable renewables. Wind and solar have become the cheapest forms of new electricity generation in history, with solar costs falling by around 87% and battery storage by more than 90% since 2010, and they do not depend on shipping through war‑prone chokepoints. Scaling up local energy communities, rooftop solar, heat pumps, smart grids and green storage can turn households and communities from passive bill‑payers into active participants in a resilient energy system. Demand reduction and fair transport. Instead of subsidising fossil fuels for private cars, governments can introduce affordable climate tickets for public transport, strengthen rail networks and night trains, and support remote working and speed limits to cut oil demand. Fair transport policies reduce emissions and shield people from future oil price spikes. June 10 2015, Japan, Kanagawa-ken. Neighbors Visiting at Farmer’s Market in Japan © Kayo Sawaguchi / Greenpeace Resilient food system. Large‑scale renovation of homes, phasing out gas from buildings, and investing in agroecology to break dependence on fossil‑based fertilisers can turn cities and rural areas into climate‑resilient spaces, while making heating and food more affordable in the long run. Tax justice and ending fossil fuel bailouts. Ending fossil fuel subsidies and broad tax cuts, introducing permanent taxes on super‑profits and on the ultra‑rich, and banning fossil fuel advertising can help fund solutions that can actually protect people from energy shocks while accelerating the transition. February 24 2025, Germany, Nauen. Wind Farm. © Paul Langrock / Greenpeace Breaking free from fossil fuels is not just climate policy, it is an anti-inflation policy, social policy and peace policy. As long as we remain locked into oil and gas, we will remain trapped in repeated cycles of fossilflation, war‑fuelled price shocks and widening inequality. Shifting to renewables, efficiency, fair taxation and justice‑based solutions, is both the opportunity and the precondition for real energy independence, economic stability and lasting peace. What can you do? For us to fully tackle this situation, we have to look at both its causes and its solutions. You can start by calling it the right way: fossilflation, so that we put the light on the oil and gas addiction that is causing this crisis in the first place. Together with that, you can also demand your government to tax those fossil fuel polluters that are reaping astronomical profits from the war. That money would fund the policies and measures that are needed to protect you and your community in this and the next crises, as well as to finance the shift towards the clean, stable and renewable energies that we so urgently need. The post When oil sets the price appeared first on 350.