The escalation of the military conflict in the Middle East poses a serious threat to the eurozone economy. The main source of this threat remains the sharp rise in energy prices, which could push inflation in the European Union above 3% as early as 2026.
According to Goldman Sachs economists, every 10% increase in oil prices adds approximately 0.3 percentage points to headline inflation in the eurozone. Since late February, Brent has approached $100-$120 per barrel several times, while European gas prices (TTF) temporarily nearly doubled. Although oil experienced a sharp downward correction on March 10-11 following US President Donald Trump’s announcement that the active phase of the operation would soon end, analysts warn that a sustained level above $90-$100 per barrel will maintain strong inflationary pressure.
European Commissioner for the Economy Valdis Dombrovskis, at a meeting with EU finance ministers, stated that if Brent prices remain high around $100 and the gas market remains under pressure, eurozone inflation in 2026 could exceed 3%, representing a 0.7-1 percentage point increase. higher than previous forecasts (approximately 2.1%). Economic growth under this scenario will contract by an additional 0.3–0.4 percentage points.
“The most significant channel for transmitting the consequences of the conflict in Europe is energy. Most EU countries remain net importers of oil and gas,” noted Sven Jari Sten, Chief European Economist at Goldman Sachs.
Experts at the European Central Bank and other institutions emphasize that additional inflationary pressure could come from a weakening euro, rising transport costs, and spillovers in supply chains. In a worst-case scenario, according to some analysts, inflation in the eurozone could jump by 3.6 percentage points by the end of the year, forcing the ECB to return to raising rates instead of easing them.