The ongoing conflict in the Middle East is expected to have noticeable economic consequences for the Netherlands, primarily through rising energy prices and their knock-on effects on inflation and growth. New calculations by De Nederlandsche Bank (DNB) indicate that while the impact may be less severe than during the 2022 energy crisis, the risks remain significant.
Since the escalation of tensions, global oil and gas prices have risen sharply. By mid-March, oil prices exceeded 100 US dollars per barrel, while gas prices climbed above 60 euros per megawatt hour. This represents an increase of approximately 45 percent for oil and 100 percent for gas compared to levels at the end of February. The surge is largely attributed to supply disruptions caused by attacks on production facilities and restrictions on shipping routes, particularly linked to Strait of Hormuz, as well as broader uncertainty surrounding the conflict’s trajectory.
Although current price increases are notable, they remain below the peaks observed during the Russia’s invasion of Ukraine in 2022, when gas prices surged by more than 250 percent. Nevertheless, the sustained rise in energy costs is expected to feed into broader inflation. According to DNB projections, inflation in the Netherlands could increase by more than half a percentage point in both 2026 and 2027, as higher energy costs gradually translate into more expensive goods and services.
In a more adverse scenario, the economic effects would become more pronounced. Economic growth in the Netherlands could slow by around half a percentage point in 2026, partly due to weaker global trade affecting exports. Higher inflation (estimated at around one percentage point above baseline levels) would reduce household purchasing power, dampen consumption, and lower consumer confidence. Businesses, particularly in energy-intensive industries, would face rising costs, while increased uncertainty and higher borrowing costs could discourage investment.
A severe scenario presents even greater challenges. Persistently high energy prices could reduce economic growth by approximately 0.8 percentage points in both 2026 and 2027. Inflation would rise significantly, by 1.6 percentage points in 2026 and up to 2.8 percentage points in 2027. Under these conditions, household consumption could decline sharply, with spending falling by more than two percentage points in 2027 due to reduced real incomes.
The broader economic environment would also deteriorate. Rising unemployment and declining consumer confidence would further weaken demand. At the same time, exports would slow in line with reduced global trade, and business investment could drop substantially—by more than five percentage points in 2027—due to higher costs, tighter credit conditions, and uncertainty about future demand.
One key concern highlighted by DNB is the potential for persistent inflation. High energy prices tend to feed through into other sectors, including food and services, often with a delay. Evidence from the 2022 energy crisis suggests that these pass-through effects can be stronger than previously anticipated. As a result, workers may seek higher wages to compensate for lost purchasing power, potentially triggering so-called second-round effects that prolong inflationary pressures.
Overall, while the Netherlands is not directly involved in the conflict, the economic consequences underscore the country’s vulnerability to global energy markets. The extent of the impact will depend on how the situation evolves and whether energy prices remain elevated over an extended period.
References
DeNederlandscheBank . (2026, March 24). War in the Middle East: the impact on the Dutch economy. Retrieved from DeNederlandscheBank: https://www.dnb.nl/en/general-news/news-2026/war-in-the-middle-east-the-impact-on-the-dutch-economy/
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