How was the European economy affected by the Strait of Hormuz crisis? | economy

The American and Iranian approaches to the situation in the Strait of Hormuz conflict. While US President Donald Trump stresses the priority of opening the strait immediately and refuses to impose duties on ships, the Iranian Revolutionary Guard says it is monitoring and imposing smart control over the strait.

According to the interactive map presented by Abdul Qader Arada, the US Central Command talks about redirecting 116 ships and disabling 5 commercial ships, and the Hormuz Street Monitor platform says that only 4 ships crossed the strait within 24 hours.

As for the Revolutionary Guard’s numbers, they indicate that about 28 ships crossed within 24 hours in coordination with Iran.

The special economic paragraph presented by Mayada Abdo highlighted the impact of the war on the European economy, noting that the latest economic data show that the European economy began to be noticeably affected by the Strait of Hormuz crisis as a result of the disruption of energy and fertilizer supplies, which was reflected in the increase in the import bill.

The European Commission expects that the gross domestic product of European Union members will fall to 1.1%, after it was 1.5% last year. The inflation rate in the European Union has also increased from 1.9% to 3.1%, and in the Eurozone from 2.1% to 3%, according to European Commission figures.

Commission figures also show a decline in consumer confidence in the euro zone to its lowest level in 3 years due to the rise in energy prices, which was reflected in the costs of living and jobs.

European plans did not succeed

In his readings of the impact of the Strait of Hormuz crisis on the European economy, energy expert Thomas O’Donnell told Al Jazeera that the energy factor leads to inflation and affects industrial production and business in Europe, indicating that matters can be addressed by raising interest rates.

He added that European governments are moving to confront the rise in energy prices, and he talked about an emergency program that the Europeans were preparing, as they did during the Russian invasion of Ukraine and cutting off gas supplies to Europe. He said that these plans did not succeed, but rather raised prices to higher levels.

The energy expert pointed out the need for Europeans to rely on non-renewable energy that depends on global prices.

European Commission President Ursula von der Leyen had warned of the significant negative effects of the continued closure of the Strait of Hormuz, stressing the need to ensure freedom of international navigation.