EU Officials Expect Prolonged Oil And Gas Inflation

European officials warned Friday that oil and gas prices are likely to remain elevated until at least the end of 2027, increasing pressure on households and businesses across the continent.

According to EU Economy Commissioner Valdis Dombrovskis, higher energy costs are expected to drive inflation to 3.1% this year, well above earlier forecasts. Officials cautioned that rising fuel prices linked to instability in the Middle East are gradually pushing up costs across broader sectors of the economy.

EU finance ministers stated that Europe is facing stagflationary pressure due to surging energy prices from the Iran war, warning against fiscal crises from support measures.

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European Central Bank President Christine Lagarde said the economic effects of the energy shock would continue even if the regional conflict ended immediately. She warned that prices for goods and services are expected to stay structurally higher after the crisis subsides.

The report said the ECB remains focused on maintaining price stability near its 2% target and is prepared to take additional measures if necessary.

Officials also pointed to Europe’s strategic oil reserves as a safeguard against potential supply disruptions and further market volatility.

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