Are Europe ETFs at Threat Due to Iran Crisis?

A sustained spike in natural gas prices due to the escalating Middle East conflict could weigh heavily on European growth, analysts warn, as quoted on CNBC.

Global gas markets have rallied sharply amid fears that energy flows through the Strait of Hormuz -- an important shipping corridor between Oman and Iran that carries roughly one-fifth of global LNG trade -- could face prolonged disruption.

Qatar, one of the world’s largest LNG producers, stopped production on Mar. 2, 2026, following Iranian drone strikes at Ras Laffan Industrial City and Mesaieed Industrial City. Goldman Sachs estimated the pause will cut near-term global LNG supply by about 19%, as quoted on CNBC.

Europe Faces Acute Supply Risks

Europe and much of Asia are significantly more exposed to natural gas disruptions than the United States, which benefits from domestic shale production and LNG exports.

A considerable portion of Europe’s gas supply comes from LNG. With roughly 20% of global LNG production located behind the Strait of Hormuz, a continued blockage could trigger a supply crunch similar to the 2022 energy shock following Russia’s invasion of Ukraine, as mentioned in the same CNBC article.

Growth at Risk Across Europe

Goldman Sachs economists, led by Sven Jari Stehn, noted that higher energy prices typically drag on economic growth -- with the notable exception of Norway, which is a key oil producer and exporter, as quoted on CNBC.

The bank estimates that a sustained 10% rise in energy prices over four quarters would trim 0.2% from GDP in both the U.K. and the Euro Area. Switzerland, with greater reliance on nuclear and renewables, would see little impact, while Norway could benefit with a modest 0.1% rise.

ETFs to Buy/Lose

Against this backdrop, below we highlight a few Europe-based exchange-traded funds (ETFs) that should gain/lose ahead.

Likely Gainers

Norway is among the top 10 nations famous for oil exports and with its comparatively low population, oil forms the key part of the country’s GDP. Per U.S. Norway is one of the largest oil producers and exporters in Western Europe (read: Oil Prices Surge on Rising U.S.-Iran Tensions: ETFs to Gain/Lose).

Global X MSCI Norway ETF NORW gained 1.5% over the past five days. iShares MSCI Norway ETF ENOR added 1.2% over the past week.

Likely Losers

Italy, Belgium, and Poland emerge as the most exposed, with Hormuz-transited LNG (mainly from Qatar and UAE) forming significant portions of their imports: nearly 45% for Italy, and 38% for both Belgium and Poland in 2024, as quoted on Institute of Energy Economics and Financial Analysis.

iShares MSCI Italy ETF EWI lost 6.1% over the past five days, Belgium ETF EWK dropped about 6.8% and Poland ETF EPOL retreated about 7.5%.

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iShares MSCI Poland ETF (EPOL): ETF Research Reports

iShares MSCI Italy ETF (EWI): ETF Research Reports

Global X MSCI Norway ETF (NORW): ETF Research Reports

iShares MSCI Norway ETF (ENOR): ETF Research Reports

iShares MSCI Belgium ETF (EWK): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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