Economic Fears Grow as Israel-Iran Tensions Escalate, Warns Trade Chief
The escalating conflict between Israel and Iran is having far-reaching effects on the global economy, according to Dirk Jandura, the president of the German Association of Wholesale, Foreign Trade and Services (BGA). Jandura expressed concerns that the situation could lead to a blockade of the Strait of Hormuz, a vital oil transport route and subsequently impact Western industrial nations.
Already, the oil price is rising due to the conflict, Jandura noted, citing the significant portion of oil shipments that pass through the Strait of Hormuz. He warned that if Iran were to exert more pressure on the international community, it could block the strait, resulting in immediate consequences for Western nations.
The repercussions of the conflict in the region could have severe and far-reaching consequences for the global economy and ultimately, for Germany’s export-driven economy, Jandura emphasized. Some neighboring countries and Israel have already restricted or suspended their flight operations, further exacerbating the uncertainties in international supply chains, he said.
Additionally, the conflict could also have an impact on Germany’s bilateral trade, Jandura warned. With the military attacks by Israel, German importers who source goods from Israel may need to prepare for disruptions in the supply chain due to damage to infrastructure, travel restrictions and limitations on air travel, he said. While the impact of Iranian imports is expected to be minimal, the situation remains a cause for concern, Jandura stressed.