Europe is facing growing risks of a new energy crisis that could mirror the severity of the shocks following the Russian invasion of Ukraine. These warnings come as geopolitical tensions escalate around the Strait of Hormuz, a critical chokepoint for global energy supplies. Hakan Kaya of Neuberger Berman emphasized that the scale of what is at stake regarding the situation cannot be overstated. Any disruption to shipping in the strait by Iran could trigger a massive supply shock, potentially driving oil and natural gas prices to record highs. Such a scenario would exacerbate inflationary pressures across Europe and severely impact industrial output. Consequently, markets are bracing for potential downward pressure on the DAX index and the EUR/USD pair as energy security concerns mount.
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