How the Iran Conflict Could Impact Europe and the Netherlands

As the war in Iran is now into its fourth week, concerns are growing that this could pull Europe and in particular the Netherlands, into economic instability. According to a report by the Atlantic Council, Europe’s decision to move away from using Russia’s pipelines for oil following the war on Ukraine in 2022 is now putting pressure on Europe to find other means of refilling their reserves. Even though the war unfolding in Iran might seem distant to students in Maastricht, its consequences are likely to expand beyond the Middle East. From energy security, to the future of NATO, Europe as a whole and the Netherlands in particular could very well feel the impacts of the rapid escalations. 

The current escalation began in late February, when the United States and Israel launched coordinated strikes against Iran on February 28. This attack was driven by one mission both the United States and Israel wanted: the death of Iran’s longtime Supreme Leader, Ali Khamenei, who had led the country since 1989. This was followed by the death of several other Iranian officials. In response, Iran launched several key attacks on U.S. military bases across the region, including Qatar and Bahrain, with the United States now evacuating troops from the Middle East as tensions grow. Additionally, Iran brought Europe into the mix by attacking a British base located in Cyprus on March 1. A pressing concern throughout the entire war has been the blockage of the Strait of Hormuz, which is disrupting energy markets on a global scale as a vital chokepoint for global oil supply. Any disruptions that continue to happen would not remain confined to global markets, it would instead change into higher energy costs and increased living expenses that students in Maastricht may begin to feel directly.

For Europe, the war highlights a key elemental weakness. The European Union has consistently expressed diplomatic stability, but it still remains heavily dependent on external energy sources from the Middle East. If the war is further prolonged, especially the restriction of the Strait of Hormuz, oil prices are likely to rise even higher, placing exponential strain on European economies. These pressures do not just remain confined to markets or governments, moreover, they filter into everyday life. Rising energy prices would increase transportation costs, from public transit to flights, while also driving up the price of everyday goods such as groceries and utilities expenses that students in Maastricht must manage on limited budgets. In a city where student housing is already scarce, higher energy and maintenance costs could also contribute to rising rent, placing additional strain on students trying to find affordable accommodation. 

President Trump has stayed firm on his stance that the war will be short-lived but many experts along with governments remain skeptical, raising concerns about longer-term economic effects. At the same time, the European Union faces a very strategic dilemma. Europe has historically always aligned with the United States on security matters, however, recent developments and fallouts between country leaders and the United States administration have Europe taking a more cautious approach. European leaders are calling for de-escalation and diplomatic efforts rather than deeper involvement in the conflict.

The implications for the Netherlands could be very significant due to its position as a key trade-dependent economy. With the port of Rotterdam being one of the largest and most critical ports in Europe, the country relies heavily on stable global shipping and energy routes. Disruption of oil supply will lead to exponential costs for business along with consumers. In the scenario that the  war continues to rage on, oil prices will climb to $110 per barrel from $100 per barrel, according to the NL Times. Rising prices will not only just affect transportation and industry but will also place heavy economic pressure on our everyday life, including skyrocketing housing costs, an issue that is already directly affecting students in Maastricht who are navigating a competitive housing market. Additionally, as a NATO member and host to key international institutions in The Hague, the Netherlands could also face growing political and diplomatic pressure as the war continues to unfold. For students in Maastricht, these changes could also affect part-time work opportunities and financial stability, as businesses adjust to rising operational costs.

If the war does not stop soon, Europe is looking at a real possibility of having broader issues. Before the war even started, Europe was already on the trajectory of an energy crisis as Europe has relied majorly on external energy resources from the Middle East and from Asia, with experts theorizing that Europe may have to keep waiting until Asia’s market has stabilized in order to feel relief of energy costs. 

Europe could also face another humanitarian crisis as this echoes the 2015 Syrian war migration. Iran is home to 90 million people. With the scenario of a prolonged war, this will create an even larger humanitarian challenge for Europe. A displacement of people of this magnitude could place pressure on European borders, housing availability, and public resources, especially in countries already managing migration and economic strain. This could also contribute to rising political tensions within Europe, as governments are forced to respond to both economic and humanitarian pressures at the same time.

Even though the war in Iran might seem distant to students, its consequences are not expected to stay within the Middle East. As the war endures the effects would be catastrophic on global energy markets and security alliances, which are already beginning to show a downward trend, particularly for Europe and countries like the Netherlands. For students, these progressions are not  limited to just policy discussions, but are very likely to shape financial decisions. As costs keep an upward trajectory, students could be faced with a tighter budget, compromising in spending, limiting the amount of travel, and even increasing trust on part-time work to manage daily expenses and make ends meet. The war shows the full extent to which global instability can quickly turn into local economic and political challenges if the right measures are not in place.