Abedin Taherkenareh / EPA
Between the relatively quick end, the months of fighting and the change of regime. The economic impact will be different in Europe.
It is still too early for a long-term analysis: for now, it is having limited effects on the European economy.
But this situation could change quickly if the conflict prolongs and disrupts critical energy routes, warn economists cited by .
In Germany, the Ministry of Economy is expected to convene, on Tuesday, a task force with the participation of the Chancellery and intelligence services to assess risks, especially in the security of energy supplies.
Three scenarios
The German newspaper organizes the analysis into three scenarios, with very different consequences for Europe and Germany.
Days or weeks
In the first scenario, the “softest”, the fighting lasts a short time and Iranian retaliation does not cause significant damage outside the country.
In this hypothesis, the macroeconomic impact would be small, mainly because trade volumes between Europe and Iran are already low due to the tightening of sanctions in recent years, highlights Moritz Schularick, president of the Kiel Institute.
The turmoil itself around the — the critical point of energy trade — would tend not to leave lasting marks if the crisis is resolved within weeks.
The Strait of Hormuz, measuring approximately 167 kilometers, is one of the most sensitive arteries in the global energy system: around 20 million barrels of oil pass through it daily, equivalent to approximately a fifth of world consumption, in addition to close to 20% of global trade in liquefied natural gas (LNG).
Months
The second scenario is the most worrying: months of clashes, regional spread and a “permanently” impassable Hormuz.
An estimate cited by the newspaper points to annual losses in value added to the world economy in the order of 300 billion dollars.
The main transmission channel would be the persistent increase in energy prices and political uncertainty, with repercussions on investment and consumption.
For the euro zone, Commerzbank admits that inflation could rise by around one percentage point in a prolonged conflict, putting the BC in front of a dilemma: curb inflation with higher interest rates or avoid worsening already fragile growth — also pressured by trade tensions.
Regime change
The third scenario, less likely in the short term but potentially transformative, is a change of regime in Iran and the country’s reintegration into the global economy, with the lifting of sanctions.
A Wif study estimates that the removal of EU sanctions alone could increase Iranian GDP by more than 80% and generate gains of 0.3% to 0.4% in German and EU GDP — around 15 billion additional euros for the German economy, driven by exports (paper, plastics, metals and chemicals).
Normalization would also reduce energy volatility and could put downward pressure on oil prices and, in the long term, gas prices, if Iran regains production capacity and enters the LNG market.
