Europe Warns Oil-Gas Prices May Stay High Until 2027

Brief By Newsbrief / 12:54 PM on 24 May 2026

The ongoing Iran conflict is continuing to impact global economies, with the European Union warning that oil and gas prices across Europe may remain elevated until at least the end of 2027. European officials say the prolonged energy crisis is expected to increase inflation and affect the prices of everyday goods and services across the region.

Valdis Dombrovskis stated that rising energy prices have become the biggest driver of inflation in the Eurozone. According to the latest estimates, inflation in the Eurozone could reach 3.1 percent this year, compared to the earlier projection of 1.9 percent. Officials expect inflation to moderate to around 2.4 percent by 2027, though it may still remain above the European Central Bank’s target levels.

Dombrovskis explained that higher energy costs are gradually spreading to other sectors of the economy, leading to increased prices for goods and services. This ripple effect could continue putting pressure on households and businesses across Europe.

Meanwhile, Christine Lagarde, President of the European Central Bank, said that even if tensions in the Middle East ease soon, delayed economic effects would continue influencing markets for a long time. She stressed that prices are unlikely to return to earlier levels immediately after the crisis ends.

Lagarde also assured that the ECB would take all necessary measures to maintain price stability and keep inflation close to its 2 percent target. European officials further stated that the region currently has adequate oil reserves to manage potential demand pressures.

Kyriakos Pierrakakis noted that the crisis would only truly ease once shipping through the Strait of Hormuz returns to normal without disruptions or extra costs. Around 20 percent of the world’s oil and gas supply passes through this critical maritime route.