Economists warn that Europe could face significant economic impacts if a conflict involving Iran, Israel, and the United States expands.
Moritz Schularick, president of the Kiel Institute for the World Economy, told the Monday issue of “Handelsblatt” that the direct effects would likely be limited. However, if the war widens and continues for months, he cautions that “larger effects or recession risks” could arise. Schularick adds that such outcomes would only occur if the conflict became truly large and prolonged, involving ground fighting and substantial destruction.
In particular, Europe would be troubled if the Strait of Hormuz remained clogged for an extended period. The narrow waterway in front of Iran is a vital corridor for the transport of oil and liquefied natural gas.
Michael Hüther, director of the German Economic Institute (IW), contributes to “Handelsblatt” with a guest essay, arguing that the key questions revolve around whether the war spreads and whether Iran‑aligned militias such as Hezbollah and the Houthis get drawn into the fighting. He notes that logistics routes in the Middle East would then be clearly threatened – not only oil supply capacities. Roughly one fifth of the world’s oil consumption-especially to Asia-is moved through the Strait of Hormuz between Oman and Iran.
