Middle East Conflict Could Impact Eurozone Inflation and Growth, Says Commerzbank Analyst

Commerzbank's Joerg Kraemer has warned that a prolonged conflict in the Middle East could increase the Eurozone's inflation rate by 1% and hinder economic growth by several percentage points. According to Jin10, Kraemer noted that if the conflict lasts only a few weeks, the Eurozone economy might not experience significant effects. So far, Brent crude oil prices have reacted moderately to the conflict and the effective closure of the Hormuz Strait. Kraemer believes that the market is hopeful about potential negotiations by Iranian representatives, as oil prices peaked slightly above $80 per barrel during Asian trading hours. He cautioned that a longer conflict could push oil prices towards $100 per barrel, which is approximately $40 higher than mid-February prices.