Economists warn of significant economic fallout for Europe if the conflict between Iran, Israel, and the United States escalates. Moritz Schularick, president of the Kiel Institute for the World Economy, told “Handelsblatt” in its Monday edition that while the immediate impact of the current spill‑over would be limited, a broader and longer‑lasting war could generate larger shocks or even a recession for the region. He added that such outcomes would only materialise if the fighting turned into a large, sustained conflict with substantial on‑the‑ground battles and destruction.
A key concern for Europe would be a prolonged blockade of the Strait of Hormuz. The narrow waterway before Iran is a vital artery for the transport of oil and liquefied natural gas. Should it remain impassable for an extended period, supply disruptions could have major repercussions for European markets.
Michael Hüther, director of the German Institute for Economic Research (IW), expands on this in a guest column for “Handelsblatt”. He stresses that the central questions are whether the war will widen and whether Iran‑aligned militias such as Hezbollah and the Houthis will become involved. In that scenario, logistics routes across the Middle East would be under threat not only for oil throughput but for the entire supply chain. About one fifth of the world’s oil consumption-especially shipments heading toward Asia-passes through the Strait of Hormuz between Oman and Iran, underscoring the strategic importance of the corridor.