European leaders are sounding a critical alarm about the economic consequences of the war in Iran, warning that the new energy blockade could surpass the scale of the COVID-19 crisis or the Russian invasion of Ukraine. In a landscape marked by rampant inflation and fractured supply chains, the continent faces what experts call “the greatest threat to global energy security in history,” reports Politico.
The German Chancellor, Friedrich Merz, stated on Monday that the prolongation of the conflict will place a burden on the European economy “as heavy as the one experienced during the pandemic or at the beginning of the war in Ukraine”. His message is echoed by the Italian Minister of Defense, Guido Crosetto, who confessed to La Repubblica that the gravity of the consequences is so great that “it keeps him awake at night”.
Also, Christine Lagarde, the president of the European Central Bank, warned that the long-term effects are “probably beyond what we can currently imagine”, suggesting that the economic prospects of the continent are entering a zone of total uncertainty.
The main cause of the panic is the closure of the Strait of Hormuz by Iran. Approximately 20% of the oil and natural gas that fuels the world economy transits through this point. The blockade affects not only transport and heating, but the entire production chain in agriculture, through a possible fertilizer crisis and rising transport costs, which will lead to massive price increases on the shelf.
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