Blockade of the Strait of Hormuz Affects Imports to the EU
Alongside missing deliveries of oil, gas and other basic materials, a blockade of the shipping traffic also affects trade flows from the EU indirectly via global supply chains. That’s according to a recent analysis by the ifo Institute and Econpol Europe. “Imports from Iran and neighboring countries, which are delivered to Europe via the Strait of Hormuz, account for a comparatively small portion of all imports. The situation is different when looking only at oil and gas deliveries. Risks also include indirect effects via global supply chains,” says Lisandra Flach, Director of the ifo Center for International Economics.
According to calculations, the share of imports from Iran and neighboring countries that are delivered to the EU via the Strait of Hormuz is around two percent of total extra-EU imports. By contrast, the shares for crude oil and liquid gas are significantly higher at 6.2 and 8.7 percent respectively. In addition to these potential supply bottlenecks in the event of a blockade, Flach sees indirect risks: “A blockade of the Strait of Hormuz could severely restrict the oil exports of the Gulf states to the west of the strait. Even if the direct effects for Europe are not substantial, the indirect effects of rising oil prices and supply chain disruptions pose a greater risk for Europe.”