The European Union (EU) may lose up to 1.3 million jobs this year because energy prices have gone up following the US-Iran conflict. The European Commission said on 4 June, 2026 that industries using a lot of energy will face the biggest problems.
The car industry is expected to be hit the hardest. The Commission estimates that up to 6,00,000 jobs in car manufacturing could be at risk. Other sectors such as construction, metals, chemicals, and transport could lose around 56,000 jobs together. Clean energy projects are also in trouble. Around 85,000 jobs in battery making and nearly 59,000 jobs in solar panel making may be lost. The steel industry could lose another 4,500 jobs due to higher costs linked to low-carbon rules.
Rising gas and fuel prices have made it more expensive for factories and transport companies to operate. This means higher costs for making goods and moving them to markets. Low-income families may also feel the impact, as they could spend 1.4 per cent more of their income on fuel for travel. The EU’s manufacturing sector employs about 30 million people, while services provide jobs to nearly 87 million.
Governments are finding it harder to help people and businesses this time compared to 2022, when they gave large subsidies after the Russia-Ukraine war. Officials say debt is higher and economic growth is slower now, leaving less room for spending. The European Commission has proposed measures under ‘AccelerateEU’, including cuts to energy taxes and steps to manage fuel shortages. But it has also warned that the crisis could last for months or even years, depending on how the situation in the Middle East develops.