Oil price surge sounds the alarm, Germany may lose 46 billions due to Middle East conflict

⑴ The German Economic Institute (IW) released a forecast on Thursday, stating that if the Middle East conflict continues, Germany's economy could suffer a blow of up to 40 billion euros (approximately 4.64 billion dollars) over the next two years due to soaring oil prices, posing a serious threat to the economic recovery process. ⑵ The institute pointed out that although direct trade between Germany and Iran has declined for many years, Germany's high dependence on energy prices and imports still exposes it to significant risk. The current focus is entirely on the anticipated rise in oil prices. The escalation of the Middle East conflict is considered to have a "serious impact" on Germany's economic development. ⑶ IW conducted calculations based on different oil price levels: If Brent crude oil rises to 100 dollars per barrel, Germany's GDP will lose 0.3% in 2026 and 0.6% in 2027, which means a cumulative economic loss of about 40 billion euros over two years. ⑷ If oil prices further climb to 150 dollars per barrel, the impact will be even more severe, potentially reducing Germany's GDP growth by 0.5 and 1.3 percentage points in 2026 and 2027 respectively, with economic losses exceeding 80 billion euros.