The ongoing conflict involving the United States and Israel against Iran has had far-reaching economic repercussions, extending well beyond the Middle East and significantly impacting major European economies. Two months after the escalation, the consequences are increasingly evident in rising inflation, recessionary pressures, and disruptions to global supply chains, particularly following closures and instability near the strategically vital Strait of Hormuz.

European officials have highlighted the scale of the economic disruption resulting from the conflict. Germany has been notably affected, with Finance Minister Lars Klingbeil attributing a sharp decline in economic growth and soaring fuel and energy costs to the war, despite Berlin’s non-involvement in the hostilities. Klingbeil indicated that Germany's economic growth has effectively been halved, a setback compounded by the ongoing energy crisis triggered by the war in Ukraine. Additionally, Germany’s automotive industry, already under pressure, is experiencing paralysis due to increased energy costs and delays in the supply of parts dependent on the Strait of Hormuz.

Germany’s Federal Minister of Economics, Katharina Reich of the Christian Democratic Union, also projected subdued growth for the country, forecasting GDP expansion limited to just 0.5 percent this year. The economic strain, she noted, is a direct consequence of the Persian Gulf conflict.

Italy has faced similar challenges, with Prime Minister Giorgia Meloni emphasizing inflation control—particularly regarding energy prices—as a top priority in response to the conflict’s mounting pressures. Meloni indicated the war’s inflationary impact threatens to severely hamper Italy’s GDP growth, necessitating urgent policy measures.

Spain, by contrast, has shown notable economic resilience. The country’s GDP grew by 0.6 percent in the first quarter compared to the previous period, with an annualized rate of 2.7 percent. Spain’s Economy Minister, Carlos Cuerpo, attributed this performance to a diversified energy strategy, including a strong emphasis on renewables, which constitute 55 percent of the country’s energy mix, and diversified oil imports from the United States and Africa rather than the Persian Gulf. Alongside a €5 billion support package aimed at households and businesses, these factors helped mitigate the war’s economic impact. Nonetheless, inflation remains a concern in Spain, with elevated fuel prices persisting despite a recent drop in the overall inflation rate to 3.2 percent in April.

European Commission President Ursula von der Leyen warned that the fallout from the conflict in West Asia could persist for months or even years. She described the current energy crisis as the second significant challenge of its kind within four years and outlined a threefold approach to addressing the situation: enhancing coordination at the European level, implementing measures to protect consumers and businesses, and pursuing systematic modernization of energy consumption across the continent.

The situation underscores the complex economic entanglements resulting from the conflict, illustrating how geopolitical tensions in one region can reverberate globally, affecting even those nations not directly involved in the hostilities.