The European Central Bank raised its deposit rate to 2.25% in June, its first hike since 2023, as euro area inflation reached 3.2% in May 2026. This decision follows Brent crude surging from $70 to $118 per barrel, driven by coordinated Israel-US strikes on Iran beginning February 28, 2026. The ECB’s projections for Q3 2026 put oil prices between $88 and $166 per barrel depending on conflict intensity. The ECB described the oil price response as « surprisingly restrained, » reflecting policymakers’ concerns about a potential escalation of Middle East tensions threatening the Strait of Hormuz.
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