Inflation in the EU is hitting record highs due to the oil crisis and rising fuel prices, according to the WSJ
Europe is facing a new wave of inflation amid rising energy prices caused by the escalating situation in the Middle East. In April, inflation rates in Germany and Spain exceeded analysts’ expectations and reached their highest levels in a long time.
This was reported by The Wall Street Journal.
Specifically, consumer prices in Germany rose by 2.9% year-over-year, up from 2.8% in March. According to Destatis, this is the highest rate since the beginning of 2024. In Spain, the situation is even more challenging—inflation accelerated to 3.5%, marking the highest level in the past year, as recorded by INE.
The main driver of price growth was the energy sector. In Germany, energy costs jumped by 10.1% at once, dealing the hardest blow to households since the 2023 energy crisis. Analysts attribute this primarily to tensions surrounding the Strait of Hormuz, a key route for oil supplies. Against this backdrop, the price of Brent crude oil exceeded $110 per barrel.
The lack of progress in negotiations between the U.S. and Iran creates additional uncertainty, heightening investor fears and putting pressure on energy markets.
The European Central Bank is closely monitoring the situation, as new inflation data could influence future monetary policy. ECB President Christine Lagarde cautioned against expecting a quick improvement in the situation.
“There is no easy path back to where we were before this conflict erupted. Households and firms have just weathered a major inflation shock and may be more sensitive to rising costs. The memory is still fresh,” she said.
Economic expectations in Europe are deteriorating: relevant indicators have fallen to levels seen during the 2020 pandemic. According to ECB estimates, every 14% increase in oil prices adds approximately 0.5% to overall inflation. In 2026, it could average 2.6%, exceeding the 2% target.
At the same time, pessimistic scenarios foresee further deterioration: in the event of a protracted conflict, inflation could reach 4.8% in 2027. This would mean a prolonged period of high prices and a decline in purchasing power for millions of Europeans.
Global oil prices are rising steadily on Wednesday, April 29, 2026, due to the escalation in the Middle East and uncertainty regarding future supplies. The price of June Brent futures on the London ICE exchange rose by nearly 3% to $114.57 per barrel.
U.S. President Donald Trump has ordered the U.S. Navy to prepare for a prolonged blockade of the Strait of Hormuz, seeking to maximize economic pressure on Iran. The war has been ongoing for three months, and the new strategy could significantly alter the balance of power in the region.
Prior to this, French President Emmanuel Macron announced active diplomatic efforts aimed at restoring free navigation in the Strait of Hormuz. During a visit to Andorra, he emphasized that he is negotiating with both Donald Trump and the Iranian side to resolve the energy crisis “at its root.”
Iran has presented the United States with a new proposal to resolve the situation surrounding the Strait of Hormuz and end the war. At the same time, Tehran is proposing to postpone nuclear negotiations to a later stage.
U.S. Secretary of State Marco Rubio stated that Iran continues to attempt to maintain control over the Strait of Hormuz. He emphasized that such approaches are unacceptable to the United States and underscored the importance of freedom of navigation in the region.
