The ECB’s decision to increase its deposit rate to 2.25% in June 2026 follows a significant rise in Brent crude prices, which surged from approximately $70 to $118 per barrel, contributing to a euro area inflation rate of 3.2% in May 2026, exceeding the ECB’s 2% target. The spike in oil prices was triggered by coordinated military actions involving Israel and the United States against Iran, which raised concerns over potential supply disruptions in the Strait of Hormuz. The ECB’s analysis described the oil price response as ‘surprisingly restrained,’ indicating heightened concerns among policymakers. Projections for Q3 2026 suggest oil prices could fluctuate between $88 and $166 per barrel, with implications for inflation and economic stability in the euro area, particularly if the conflict intensifies.