Von der Leyen: Hormuz closure cost Europe €127B

The closure of the Strait of Hormuz has cost Europe €127 billion due to higher fossil fuel prices, Ursula von der Leyen said on Tuesday, amid fears of a re-escalation of conflict in the region, Report informs referring to Rapporteur.

Speaking at an event in Brussels, the European Commission president said that the surge in oil and gas prices triggered by the Iran war's onset underscores the importance of reducing the EU's dependence on fossil fuels.

Roughly a fifth of the world's seaborne oil and liquefied natural gas passed through the strait prior to the US-Israeli attack on Iran in late February, which led Tehran to de facto close the strategic waterway and launch attacks on neighbouring countries' energy infrastructure.

"Since the closure of the Strait of Hormuz, imported fossil fuels cost Europe an additional €127 billion without a single molecule of energy in addition," von der Leyen said. "€127 billion just because of the closure of this Strait of Hormuz. So when we import oil and gas, we also risk import[ing] the shocks and the crisis that come with them."

Her remarks come after the US struck Iran's Qeshm Island, which is located in the strait, on Monday night, in what Washington described as a "defensive measure" to protect American military assets in the region.

Donald Trump, the US president, and Benjamin Netanyahu, Israel's prime minister, have both threatened to renew strikes on Iran following the US mid-term elections on Tuesday.

Trump, however, denied yesterday that he was considering striking Tehran after the midterms. The elections are likely to result in his Republican Party losing control of the House of Representatives and possibly also the Senate to the Democrats, amid deep voter anger over soaring energy prices.

JD Vance, the US vice president, also sought to downplay tensions yesterday, telling reporters that he and Trump "both feel really good about the prospect of potentially coming to a negotiated settlement."

Friedrich Merz, Germany's chancellor, recently echoed von der Leyen's warning about the war's impact on Europe's economy.

"Businesses and consumers in Europe have paid more than €100 billion extra because energy has become more expensive as a result of this conflict," he told reporters last week. "We therefore also have an economic interest in bringing this conflict to an end as quickly as possible."

Brent crude, the global oil benchmark, was trading at around $106 per barrel by Tuesday noon CET, up around 1% for the day.