War in Iran and its impact on Europe

The background to the war in Iran

Iran did not comply with US demands, which included ending its nuclear programme, limiting the number of ballistic missiles and ceasing the financing and arming of militias (Hamas, Hezbollah, Yemeni Houthi militias, and Iraqi Shiite militias) that destabilise the Middle East and threaten Israel. Since the 1990s, Iran has been playing a risky geopolitical game with the United States.[1] Over the past 45 years, both sides have threatened the other with extreme destruction, and the winner has been the one that managed to convince the other that it would never back down, even if it meant total collapse. The essence of Iran’s strategy was to convince the United States that the cost of confrontation (regional war, skyrocketing oil prices and potential nuclear escalation) was higher than the cost of compromise. That is why it has built up its missile capabilities, proxy networks and nuclear programme. Not necessarily to actually use them, but to make concessions appear more rational to the Americans.

Some believe that the Iranian regime developed this strategy based on the 1979–1981 Iran hostage crisis, which ultimately resulted in a victory for the Iranians and a defeat for Democratic President Carter.[2] As a result, Iran, particularly over the past 20 years, has developed ballistic missiles, drones and a nuclear programme, funded militias and built up multi-layered threats around US military bases in the Persian Gulf and Israel to create a situation in which Washington would back down from open confrontation.

This strategy worked well for Iran in 2015, when Obama agreed to allow Iran to play a greater role in the region and continue its nuclear programme, albeit with only limited uranium enrichment. President Trump argued that the 2015 Iran nuclear deal (JCPOA) was a bad deal for the United States and merely encouraged Iran to continue its programme, prompting the US to back down in order to avoid a confrontation with Iran. Trump withdrew from this agreement in 2018.[3] Iran resumed its nuclear programme during the Biden administration. As soon as Trump returned to power in 2025, he sought to secure a new, much more restrictive agreement, initially in April 2025. The negotiations broke down, leading to the outbreak of the Twelve-Day War in June 2025. Israel was the aggressor in the conflict, while the United States primarily provided defence support to Israel. Since the US and Israel had won this conflict militarily, Trump believed that Iran would be forced to accept the new terms.[4]

The Iranian regime did not learn from its mistakes and ignored certain factors that have changed the context compared to the Iranian successes of 1979 and 2015. The timing of the 2026 war can be attributed to a combination of regional and global factors. It primarily reflects US strategic interests in the Middle East, but Israel plays a significant role in determining the timing, acceleration and intensity of the war. Since Iran possesses military capabilities with which it can threaten Israel,[5] Tel Aviv was prepared to take the risk of war, even when the Trump administration wanted to give the negotiations more time.  During the two-round talks between the US and Iran in February, Netanyahu convinced Trump that it was not worth signing an agreement of principle with Iran, because Tehran would not abide by it anyway.[6]

The global dimension of the war is the rivalry between the United States and China.[7] China is the primary beneficiary of Iranian oil, holds the most strategic assets and investments in Iran and is the United States’ primary economic rival in the Middle East (China is the primary partner of the Gulf states). Should the US succeed in bringing about regime change in Tehran, it could reduce or even eliminate China’s influence not only in Iran but also in the Arab Gulf states. Bringing Iran under control would also disrupt China’s “One Belt, One Road” initiative, in which Iran plays a key role. Now that the US has taken control of Venezuela’s oil, it is working to reduce China’s economic dominance in the Middle East.

Structure and popular support of the Iranian regime

Iran is struggling with a severe economic crisis, marked by inflation exceeding 40% and the collapse of the Iranian rial, which had fallen to 1.4 million rials to the dollar[8] by early 2026, a 20,000-fold decline from its 1979 value, triggered a wave of nationwide protests in late 2025 and early 2026, which the regime violently suppressed with the help of the military organisation known as the Revolutionary Guard Corps (IRGC).[9]

The IRGC has long since ceased to be merely a military force: it has built an extensive economic empire that encompasses the oil and gas sector, transportation infrastructure, the banking sector, telecommunications, agriculture and the real estate market. It is estimated that the IRGC controls 30-40% of the Iranian economy, including ports, telecommunications and the construction industry.[10] Iran’s 2025 budget act allocates 51% of oil and gas export revenues to the IRGC and the Revolutionary Guards.[11] The Revolutionary Guard Corps is essentially a state within a state, for which Khomeinism serves merely as a veneer of legitimacy: IRGC commanders have drawn up plans in case the clerical regime collapses. These plans call for the Guard to position itself as a stabilising force, essentially staging a coup.

Reactions from minority groups in Iran

In terms of Iran’s ethnic composition, Persians account for 51% of the total population, Azeris for 24%, Kurds for 8–17%, and Arabs and Baluchis for 3% and 2%, respectively. The reactions of minority groups vary and reveal divisions. During the January protests, virtually every Kurdish city came to a standstill; Baluchistan joined in a day later, also driven by a long history of ethnic and religious marginalisation. In contrast, the Azeri regions reacted more slowly and cautiously. This is because they occupy relatively favourable positions within the Islamic Republic’s political, military and economic institutions.[12] At the same time, it is very important to bear in mind that even partially accommodating demands for autonomy would present an almost insurmountable challenge to any successor system.[13]

Fragmentation of proxy networks

With Khamenei’s death, the regime’s network of proxies no longer functions as a coordinated war machine, but rather as a series of isolated islands. In Lebanon, Hezbollah is fighting its own war for survival; in Yemen, the Houthis are facing an internal offensive; and in Iraq, the militias are risking the collapse of the Iraqi state.[14] As of 5 March, Iraqi militias had carried out 29 drone and missile attacks and had also threatened European forces stationed in Iraq if they intervened in the conflict.[15] At the same time, proxy militias are currently constrained by domestic political realities and limitations in their capabilities. Therefore, it is possible that their response will remain largely rhetorical in the short term, supplemented by a few symbolic strikes.[16] Although Hezbollah possesses some 25,000 rockets, 1,000 drones, and several thousand fighters, the 2024 war has severely weakened its freedom of movement and military presence along the Israeli border. The Lebanese government has banned its military activities, and its alliance with the AMAL Movement is at its most fragile point ever.[17]

Economic consequences

Iran officially declared the Strait of Hormuz closed on 2 March 2026 and threatened ships attempting to pass through. According to data from the energy consulting firm Kpler, 13 million barrels passed through the strait daily in 2025, accounting for approximately 31% of global seaborne crude oil traffic.[18] Iran achieved this blockade not through a conventional naval blockade, but through low-cost drone strikes, which were sufficient to prompt insurance companies and shipping firms to withdraw from the route.[19] The strait is not closed due to a physical barrier, but because of the perceived risk. This means that a military presence alone is not enough to reopen it; shipowners and insurers must be convinced of its actual safety.[20] This foreshadows a prolonged crisis. Maersk, CMA CGM, and Hapag-Lloyd have suspended through traffic, tanker shipments have dropped to virtually zero, and Qatar has completely halted its LNG production, which accounts for nearly 20% of global LNG supply[21].

Europe is directly affected by the fact that approximately 30% of the continent’s jet fuel supply comes through the strait, and one-fifth of the global LNG supply also passes through this route.[22] Bloomberg Economics estimates that, in the event of a complete closure, the price of Brent could rise to USD 108 per barrel, having already climbed above USD 92 in early March.[23] Europe has cut itself off from Russian oil and gas, so the inevitable rise in oil and gas prices will fuel inflation and slow GDP growth. For example, a 14% increase in oil prices could lead to a 0.5 percentage point rise in inflation and a 0.1 percentage point decline in GDP growth.[24] This is a cautious estimate, as oil prices had already risen by 13% after the first three days. Despite promises of compensation (increased production), supply chain disruptions in the Persian Gulf are affecting supplies from other regions, which will drive up costs and, consequently, prices as well. The war in Ukraine, which is targeting energy supply, and the war in the Middle East, which is affecting energy prices, together represent the worst-case scenario for Europe’s economies, especially if the two conflicts continue to escalate.

Distribution and fragmentation of the Iranian diaspora in Europe

It is estimated that 6 to 8 million Iranians live abroad, most of them in Western countries. There are approximately 1 million living in Europe, most of them in Germany, the United Kingdom, Sweden and France. The diaspora consists partly of recent emigrants with strong ties to their homeland, and partly of second- and third-generation immigrants, many of whom have held prominent political or economic positions in Canada, the United States, Germany, Sweden, Norway, France or the Netherlands.[25] Following the strikes on 28 February, the Iranian diaspora held celebratory demonstrations around the world. On 14 February, 250,000 people gathered in Munich, while 350,000 people each took part in the demonstrations in Toronto and Los Angeles, making this the largest protest in the history of the Iranian diaspora.[26]

According to analysts at the GIGA research institute in Hamburg, the diaspora is “deeply fragmented” and increasingly polarised, with deep divides between monarchists, republican democrats, the left-wing opposition, supporters of the People’s Mojahedin Organization of Iran (MEK)[27] and minority self-determination movements. Although they are represented in the parliaments or institutions of at least seven European countries, they are unable to convey a single political message.[28] This divide is not only political but also has security implications: on 6 March, a former spokesperson for the Islamic Republic declared the London-based Iran International TV channel a “legitimate target”.[29] British cyber counterintelligence has arrested four people in connection with a spying case linked to an Iranian intelligence network, and an Iranian hacker group has offered a USD 250,000 bounty for the assassination of Iranian-American and Iranian-Canadian activists.[30]

Iran and Hezbollah have established extensive networks in Europe, particularly in Germany.[31] The case of the Islamic Centre in Hamburg (IZH), commonly known as the “Blue Mosque”, clearly illustrates the dual nature of the Iranian diaspora in Europe. For decades, the German Federal Office for the Protection of the Constitution has regarded the institution as the Iranian regime’s “most important and influential European propaganda centre”. The director of the centre was appointed personally by Khamenei’s senior adviser, and the director was directly accountable to that senior adviser.[32] On 24 July 2024, the German Ministry of the Interior banned the IZH and five affiliated organisations and conducted raids at 53 locations in five federal states—including Hamburg, Frankfurt, Munich, and Berlin. According to the reasoning behind the decision, the IZH supported Hezbollah terrorists and spread aggressive anti-Semitism.[33]

This case should also be evaluated in a broader context: In 1992, Iranian agents murdered three Iranian dissidents and their interpreter at the Mykonos restaurant in Berlin; in 2023, a German court convicted a German-Iranian man who, with Iran’s assistance, had planned an attack on a synagogue in Bochum.[34] The closure of the Shia center (hawza) in Hamburg is therefore not an isolated incident, but an attempt to partially dismantle a long-standing, deeply entrenched network of the regime.

The Iranian diaspora in Europe is thus simultaneously the regime’s opposition, its target, and—to a lesser extent—its tool. It is a community whose internal divisions, institutional ambitions and security vulnerabilities all have direct implications for European politics. According to Századvég’s Project Europe survey, conducted in 30 European countries and published in February 2026, 48% of Western Europeans believe that, in the event of war or political unrest, immigrants would remain loyal to their country of origin. In Central Europe, 52% of respondents agree that immigrants often remain loyal to their home countries, while 67% of Hungarians share this view. Countries with rates similar to Hungary’s include Cyprus (67%) and Greece (65%).[35]

Conflict import, or clashes between immigrants, has long been a phenomenon in Europe: between Moroccans and Algerians in France, between Kurds and Turks in Germany, Austria, and Belgium, between Indians and Pakistanis in the United Kingdom, and between Syrian Arabs and Kurds in Germany and Austria. Given the stakes of this war, clashes between Iranians and immigrant groups from Iranian Kurdish, Persian and Azeri minorities are likely to occur in European cities.

Migration-related issues

Iran shares a 534-kilometre long border with Turkey and has a population of 92 million. If ground operations take place in Iran’s northwestern regions, residents will be forced to flee and seek refuge in neighbouring countries (Azerbaijan, Iraq, or Turkey). In 2025, approximately 750,000 registered and an estimated 2.6 million unregistered Shia Afghans lived in Iran.[36] Because of the war, this population may lose their jobs and livelihoods and migrate westward. Afghans have always been a constant presence on the Balkan route.

The Iranian Kurdish population is estimated at between 7 and 14 million people, and they live mainly in the country’s northwestern regions, the provinces of West Azerbaijan, Kurdistan, Kermanshah, and Ilam, which are among the poorest and most underdeveloped areas in Iran.[37] Multiple sources report that the CIA is actively working to arm Iranian Kurdish militant groups with the aim of fomenting an uprising in Iran. The Trump administration is holding talks with Iranian opposition groups and Iraqi Kurdish leaders regarding military support.[38] On 22 February 2026, six Iranian Kurdish opposition parties formed the Coalition of Political Forces of Iranian Kurdistan (CPFIK), which, in a joint statement on 2 March, called on the Iranian armed forces to secede from the Islamic Republic.[39]

Turkey, which as a NATO member could serve as a potential host country for refugees, protested publicly against the possible involvement of Iranian Kurdish groups, designating PJAK as a terrorist organisation and warning that their activities “negatively affect the stability of the entire region”.[40] At the same time, the government of the Kurdistan Region of Iraq is striving for neutrality and rejects any attempts by Iranian Kurdish groups to launch attacks against Iran from Iraqi territory.[41] The tensions between Washington, Erbil and Ankara also have direct implications for the EU in terms of migration pressures and the management of transit routes.

European institutional and NATO dimensions

The stance of European NATO member states on the conflict is already sharply divided. Spain expelled US military aircraft from its bases, the United Kingdom authorised the use of the Akrotiri base in Cyprus for US defence operations, and Germany, in the words of Chancellor Friedrich Merz, declared the end of the Iranian regime to be in the common interest of the United States and Israel. France has sent missile defence and anti-drone systems to Cyprus. Cyprus is a member of the EU but not of NATO, so it could request collective defence not under Article 5 of the NATO Treaty but under Article 42.7 of the EU Treaty, which it has not yet invoked.[42]

The threshold for applying Article 5 is currently high: Mark Rutte, NATO Secretary General, stated that “no one is talking about Article 5” after debris from an Iranian missile fell on Turkish territory.[43] At the same time, the US air base at Incirlik, where tactical nuclear weapons are stored under NATO’s nuclear sharing programme, holds a special strategic status. A potential Iranian attack there would not be a tactical move, but a strategic one with nuclear implications.[44] This tension, with European public opinion divided, member states taking differing positions, and NATO’s collective defence mechanisms being put to the test, is in itself one of the most significant European consequences of the war with Iran.

Summary

The Iranian regime is playing a zero-sum game: either it remains in power, or it drags the country down with it when it falls. Regimes based on confrontational ideologies (Arab nationalism in Saddam’s case, Islamism in Iran’s case) cause the destruction of their own countries.[45] The threat posed by Iran stems from three factors: the IRGC’s economic and military autonomy, its nuclear and missile capabilities, and the decentralised nature of its proxy networks. A regional power that lacks legitimacy but is armed and has economic interests is unpredictable and a potential risk when faced with an existential threat. This partly explains why the collapse of the Iranian regime would not necessarily lead automatically to stability—neither in the region nor from Europe’s perspective. The 2026 war in Iran will have a severe impact on energy prices and the supply chain, a fact that is already evident. Europe cannot bear the consequences of two wars.

The origin of the conflict

• On 28 February 2026, Israel and the United States dealt a major military blow to Iran, marking the largest military operation for the US since the 2003 Iraq War.
• The conflict arose out of regional power struggles, competition for resources and security policy interests.
• Behind the war lie US demands that Iran:
• halt its nuclear programme,
• restrict its ballistic missile programme,
• and cease funding proxy militias operating in the Middle East.

Geopolitical context

Iran has long used a strategy of deterrence against the United States.

The tools to do this are:

• ballistic missiles,
• drone programme,
• regional proxy militias,
• developing its nuclear programme.

The strategy was to make the cost of confrontation higher for Washington than the cost of compromise.

The global dimension of the conflict is exacerbated by the rivalry between the United States and China:

• China is the biggest buyer of Iranian oil,
• has significant investments in the country,
• Iran plays a key role in the “One Belt, One Road” initiative.

Structure of the Iranian regime

The Iranian economy is in serious crisis:

• inflation exceeds 40%,
• the value of the rial fell to 1.4 million rials per dollar by the beginning of 2026.

One of the key players in the political system is the Revolutionary Guard Corps (IRGC).

The IRGC:

• is not just a military organisation,
• it controls 30-40% of the Iranian economy,
• and is present in the oil and gas, telecommunications, banking and infrastructure sectors.

It is a “state within the state” and could play a role in a possible transition of power.

Ethnic and social fault lines in Iran

Iran is a multi-ethnic state, where ethnic proportions are important for political stability.

• During the protests, resistance was particularly strong in the Kurdish and Baloch regions.
• The Azeri community, on the other hand, occupies relatively favourable positions in political and economic institutions.

Economic impacts in Europe

Europe is particularly vulnerable to energy supply disruptions.

Main effects:

• Approximately 30% of the continent’s jet fuel supply arrives via this route.
• Brent oil prices could rise to around USD 108/barrel in the event of a full closure.
• The rise in energy prices will increase inflation and slow economic growth.

For example:

• 14% rise in oil prices
  → +0.5 percentage points inflation
  → -0.1 percentage points GDP growth

Migration consequences

Iran is a country of 92 million people sharing a 534 km border with Turkey.

Potential migration factors:

• war refugees from Iran,
• Afghan refugees in Iran migrating to the West,
• destabilisation of Kurdish regions.

Iran currently has:

• around 750,000 registered Afghan refugees,
• and 2.6 million unregistered Afghans.

Political and security implications in Europe

The position of the European NATO member states differs significantly.

Examples:

• Spain: rejection of American airplanes.
• United Kingdom: support for US operations.
• Germany: supporting the end of the Iranian regime.
• France: missile and drone defence systems in Cyprus.

Summary

The Iran conflict poses risks for Europe in several dimensions:

• energy supply disruptions
• economic impacts and inflation
• migratory pressure
• security and geopolitical tensions

The stability of the Iranian regime depends on three main factors:

1. the economic and military power of the Revolutionary Guard Corps
2. nuclear and missile capabilities
3. the functioning of regional proxy networks