Von der Leyen warns Iran war may damage Europe for years

[STRASBOURG] The European Union warned the continent may spend years grappling with fallout from the US-Israeli war in Iran, signalling that an energy price spike will not abate soon.

“There is also a harsh reality we all need to face: the consequences of this conflict may echo for months or even years to come,” said European Commission President Ursula von der Leyen, the EU’s top executive, speaking before the European parliament in Strasbourg on Wednesday (Apr 29).

The sobering message comes as Europe faces an energy and supply crunch as a result of the war, which prompted Iran to block the Strait of Hormuz, a vital waterway for commercial shipping. The continent is now sagging under elevated oil and gas prices, and fearing a scarcity of essential products like jet fuel and fertiliser.

Von der Leyen noted that the EU has spent an extra 27 billion euros (S$40.4 billion) on fossil fuel imports since the war began in late February. The Bruegel think tank also estimated that EU countries have committed over 10 billion euros to shield consumers and businesses from rising energy prices.

Last week, the commission proposed its first set of measures to address the looming energy crisis, but EU leaders pressed for more aggressive steps during a summit on Friday.

Yet EU leaders are split over the pacing of support. Some favour a gradual approach, while others want a bigger package of measures up front, people familiar with the matter said on the condition of anonymity. BLOOMBERG