Prolonged U.S.-Iran conflict could trigger major energy shock in eurozone
5 hours ago
- #Eurozone
- #Geopolitical Risk
- #Energy Crisis
- The eurozone is highly vulnerable to a prolonged U.S.-Iran conflict due to its heavy reliance on imported oil and gas.
- ING warns that rising energy prices and supply disruptions could trigger an energy shock, reminiscent of the 2021-2023 crisis.
- The conflict complicates ECB policy decisions, as inflation remains high while growth prospects weaken due to trade and energy uncertainties.
- A 14% oil price increase could raise eurozone inflation by 0.5 percentage points and reduce growth by 0.1 percentage points.
- Prolonged conflict risks slowing global trade due to higher energy costs, logistics disruptions, and a crisis of confidence.
- The outcome hinges on whether the conflict ends quickly or escalates into a broader regional war.