ECB's Makhlouf Warns Damaged Energy Assets May Prolong Price Pressures as Deposit Rate Sits at 2.25%
Updated
Updated · Reuters · Jun 16
ECB's Makhlouf Warns Damaged Energy Assets May Prolong Price Pressures as Deposit Rate Sits at 2.25%
3 articles · Updated · Reuters · Jun 16
Summary
Damaged energy infrastructure from the Iran war could keep price pressures elevated even after the U.S.-Iran interim deal, ECB policymaker Gabriel Makhlouf said.
Makhlouf said the shock may persist because production could recover only with a lag, supply chains may take time to normalize, and the Strait of Hormuz reopening remains unclear.
Last week the ECB raised rates for the first time in nearly three years and signaled more tightening if higher fuel costs spread into broader inflation.
Chief Economist Philip Lane said Tuesday the bank would stay proactive on inflation even as energy prices eased after the deal, while investors still see at least one more rate hike this year.
The Iran peace deal cooled oil prices, but can it stop a global food crisis from soaring fertilizer costs?
Will the Iran war's fallout finally force a global pivot away from volatile energy and food supply chains?
With Mideast infrastructure shattered, are depleted strategic reserves enough to shield the world from the next supply shock?
Inflation Under Siege: How the ECB and Energy Shocks Are Shaping the Eurozone Economy in 2026
Overview
The European Central Bank (ECB) raised interest rates on June 11, 2026, responding to persistent inflation across the eurozone. This inflation is driven by ongoing geopolitical tensions, especially the energy shock from the Middle East, where the Strait of Hormuz remains blocked after attacks on Iran by the U.S. and Israel. These events have created uncertainty in global energy markets, pushing prices higher and complicating the ECB’s efforts to control inflation. The ECB faces a delicate balance: it must manage rising prices without harming economic growth, while closely monitoring further risks from continued instability in energy supply routes.