The ongoing U.S. and Israel-Iran war will primarily impact Europe through energy market volatility, with outcomes ranging from a manageable price shock and modest growth slowdown to a severe energy-driven economic downturn, depending on the duration of the disruptions in the Strait of Hormuz. Since Feb. 28, the conflict involving Iran, the United States and Israel has evolved into an active regional conflict. The U.S. and Israeli airstrikes targeting Iranian military and strategic infrastructure and senior leadership have prompted Tehran to launch retaliatory strikes against Israel, U.S. assets in the region and Gulf states, as well as attacks on shipping across the Persian Gulf region. The Strait of Hormuz (through which approximately one-fifth of global oil consumption and liquefied natural gas trade transits) has emerged as the central pressure point, with Iran warning vessels against entering the corridor and maritime operators such as Maersk suspending routes. Oil markets reacted immediately: Brent...
