Up to €2.6 billion – that’s the estimated cost for Greece due to the Israel – Iran conflict in case of a three-month escalation of tensions in the Middle East. The greatest impacts are expected in tourism, trade, shipping and energy sectors, with the resumption of attacks in the region already causing market anxiety.
Energy sector: price increases up to 20%
In the energy sector, the cost for Greece due to the Israel-Iran conflict is estimated at +€1 billion, although Greek refineries do not depend on Iranian oil. Uncertainty in international markets is already driving prices up, and if the Middle East crisis proves not to be temporary, oil and natural gas prices could increase by up to 20%.
The €1 billion burden through energy imports corresponds to 0.4% of GDP, with direct impacts on transportation, heating and electricity, triggering a new inflationary wave.
Shipping and trade: additional burden of €800 million
Equally burdensome for Greece’s cost due to the Israel-Iran conflict, according to the newspaper “Ta Nea,” is the scenario of blocking the Strait of Hormuz. The rise in shipping insurance premiums for Greek interests is estimated between €300 and €500 million, while blocking the maritime passage would cause delays and price increases in transportation.
In trade, the escalation of tensions is estimated to bring:
· Increases of 5% to 7% in Asian imported products
· Total burden of €200 to €300 million
· Disruptions in the supply chain
· Impact on basic goods imported from Asia
Tourism: losses up to €800 million per quarter
A significant part of Greece’s cost due to the Israel-Iran conflict concerns the tourism sector. Concern prevails as cancellations from Israel and Gulf countries are estimated to cause losses of up to €800 million in the May-July quarter. Cancellations already reach 15%, while a blow is also expected to arrivals from neighboring markets, further worsening the economic impact.
Government reactions and measures
The president of EVEP, Vasilis Korkidis, emphasized that “the serious military tension between Israel and Iran, under the fear of generalized conflict, has serious and multi-level economic consequences, both regionally and globally.” The government remains on alert for the increasing cost to Greece due to the Israel-Iran conflict. The Development Ministry reacted immediately from Saturday, ordering intensive controls in the fuel market. Development Minister Takis Theodorikakos warned of zero tolerance for illegal profiteering, while complaints speak of arbitrary increases at gas stations. “The military escalation in the Middle East is extremely worrying and dangerous. De-escalation is absolutely necessary,” the minister stated.
