EU chief says there should be no tears shed for Iranian regime: 'People of Iran deserve freedom, dignity'

European Commission President Ursula von der Leyen. (AP file photo)

• Middle East war causes rising energy prices in Europe
• Iranian drone hits British base on Cyprus, trade disrupted
• Von der Leyen vows EU support for Ukraine amid Hungary block

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The ripples from war in the Middle East are already being felt in Europe, with rising energy prices and NATO allies targeted, EU chief Ursula von der Leyen said Monday.

Oil prices soared Monday peaking just short of $120 a barrel as the US-Israeli war against Iran continued into a second week, with Tehran launching fresh retaliatory strikes in the Gulf.

"We are now seeing a regional conflict with unintended consequences. And the spillover is already a reality today," the European Commission president told EU ambassadors, ahead of a midday call with Middle Eastern leaders.

"Our citizens are caught in the crossfire. Our partners are being attacked," she said, citing an Iranian-made drone hitting a British base on EU-member Cyprus, trade disruptions and the "displacement of people".

While Iran has not officially shut off the Strait of Hormuz -- through which a fifth of the world's crude supplies and a substantial amount of gas run -- shipping through the critical waterway has all but dried up.

European gas prices also jumped as much as 30 percent Monday, albeit remaining well below the peaks reached in the aftermath of Russia's 2022 invasion of Ukraine.

Von der Leyen stressed that "there should be no tears shed for the Iranian regime".

"The people of Iran deserve freedom, dignity, and the right to decide their own future -- even if we know this will be fraught with danger and instability during and after the war".

The "longer-term impact" of the war posed "existential questions" on the future of an international rules-based system and the 27-nation's bloc place in the world, she told the annual gathering of European Union diplomats in Brussels.

"The idea that we can simply retrench and withdraw from this chaotic world is simply a fallacy," she said.

Von der Leyen also addressed the Ukraine conflict and assured the gathering that Brussels will see through a vital 90 billion euro ($104 billion) loan to Kyiv that is being blocked by Hungary.

"We will deliver on our commitments, because our credibility -- and more importantly, our security -- is at stake," she said.