The United States stands on the brink of a highly-consequential decision over military escalation against Iran — yet the burdens of that decision would be shared unevenly.

Although the policy is shaped primarily in Washington, its effects would extend far beyond Iran’s borders, imposing significant economic and security costs on European Union citizens who have no meaningful role in shaping the outcome. 

This pattern is not unprecedented.

Past US policy choices toward Iran have often relied on unilateral decision-making, with significant economic, humanitarian, and geopolitical costs borne by other actors.

The European Union, in particular, has repeatedly absorbed the resulting shocks — through higher energy prices, disrupted trade, and renewed migration pressures — despite having limited influence over the decisions that generate them.

As the risk of renewed confrontation with Iran grows, examining this pattern has become increasingly urgent.

Biggest EU trading partners

Prior to the escalation of sanctions in 2008, several of Iran’s principal trade partners were EU member states — most notably Germany, Italy, France, and Spain — alongside close European allies in east Asia such as Japan and South Korea.

Germany alone accounted for roughly nine percent of Iran’s imports, while Japan absorbed more than 18 percent of its exports. This economic relationship was highly promising.

From 2000 until the imposition of comprehensive sanctions, Iran’s economy expanded at an average annual rate of 5.7 percent, ranking among the fastest in the world and comparable to China’s growth during the past decade.

As a strategic partner, Iran’s economic trajectory could have offered Europe substantial leverage during today’s heightened geopolitical competition.

Although severe sanctions in 2008 halted Iran’s economic momentum, diplomacy in 2015 created an advantageous opportunity for Europe to restore engagement while imposing verifiable limits on the nuclear program.

For Europe, the deal represented a rare opportunity to reduce regional risk while reopening avenues for trade, investment, and energy cooperation.

This balance was abruptly undone when Donald Trump unilaterally withdrew from the agreement, viewing the deal negotiated under Barack Obama as “defective at its core.”

Contrary to Trump’s promises, renewed sanctions did not collapse Iran’s economy. Instead, they accelerated a structural reorientation of trade away from Europe and toward countries such as China, Pakistan, and Brazil, gradually transforming Iran into an uncontested market and resource source for China.

Strategically, Trump’s unilateral decisions failed, turning a potential European economic partner into a competitor, while simultaneously generating severe humanitarian consequences for ordinary Iranians.

Research shows that sanctions doubled the Iranian population living in extreme poverty, reduced urban consumption by roughly one-third by 2020, and caused an average annual  17 percentage of Iran’s middle class to fall into poverty between 2012 and 2019.

Moreover, access to essential medicines — formally protected by humanitarian exemptions under international law — has been sharply restricted. Patients suffering from thalassemia, haemophilia, epilepsy, and multiple sclerosis have faced persistent shortages of life-saving treatments.

These outcomes contradict the European Union’s core values of proportionality, civilian protection, and humanitarian principles, undermining the credibility of EU commitments to its values.

The deterioration did not stop at economic pressure. In June 2025, the US strikes Iranian nuclear facilities, with Donald Trump claiming to obliterate Iran’s nuclear capabilities. He is now preparing US forces for another round of military action aimed at the very same capabilities he previously asserted were destroyed.

In response, Iran declared that any further attacks would be treated as a region-wide conflict rather than a limited exchange. Such an escalation would have immediate implications for Europe, not the US, as Iranian have proved to be capable of targeting oil and trade infrastructure across the Persian Gulf, including the Strait of Hormuz, a vital artery for global energy flows. 

Economic choke-points

Since 2022, as the EU replaced Russian energy supplies following the war in Ukraine, fuel imports from Persian Gulf countries more than tripled, reaching approximately €58.4bn.

A disruption in Hormuz, one of the world’s most critical maritime chokepoints, would drive energy prices higher than during the peak of the Russian supply shock that happened over several years. This risk extends beyond oil and gas from the Persian Gulf. Around six percent of EU crude oil imports come from Iraq, while Azerbaijan supplies roughly four percent of the EU’s combined crude oil and natural gas.

A regional conflict would place all of these energy flows at risk simultaneously, with Europe — rather than the United States — once again absorbing the bulk of the resulting economic shock. 

Refugee influx bigger than Syria crisis?

Finally, the human displacement consequences would dwarf previous crises. What became known as Europe’s “refugee crisis” in 2015–2016 involved roughly 1.2 million asylum seekers, primarily from Syria.

Iran’s population today exceeds 93 million—more than four times Syria’s population at the onset of that crisis. More importantly, Iran is already hosting approximately six million Afghan refugees following the US withdrawal from Afghanistan, reflecting yet another instance of a US decision with disproportionate costs for others.

In the event of regional war, both Iranians and displaced Afghans would inevitably seek routes toward Europe, placing additional pressure on already strained labour markets and social services.

History leaves little room for ambiguity: in the case of Iran, diplomacy worked, while coercion repeatedly failed. Military escalation has not only intensified humanitarian suffering but has also damaged Europe’s economic interests and strategic stability.

A new war would magnify these costs — falling hardest on civilians in Iran and on vulnerable communities across the European Union — while once again offering Europe little influence over decisions that profoundly affect its future.