Oil companies see soaring profits amid Iran war
As the threat of escalation in the war with Iran drives gas prices higher and hurts economies worldwide, one sector is doing really well, the revenue for Big Oil. Ali Bauman explains.
The European Central Bank (ECB) decided to maintain its interest rates unchanged on Thursday, amid ongoing tensions in the Middle East. The bank had previously raised rates last month, but the recent calm data in economic indicators led to a decision to hold steady. The ECB's monitoring of the economic impact of the Iran war intensified, as oil prices briefly rose above $100 per barrel and heightened exchanges of fire between the US and Iran became more frequent.
Despite the ongoing uncertainty, the ECB stated that energy prices were currently in line with projections from June, even though they remain well above levels recorded before the conflict. The central bank emphasized that it would continue to closely monitor the intensity, duration, and indirect effects of the energy shock on inflation.
ECB President Christine Lagarde acknowledged the possibility of future rate increases if necessary, but noted that employment figures, industrial activity, and plans to boost European defense spending were positive factors.
Eurozone inflation decreased to 2.8% in June from 3.2% in May, but energy inflation remained elevated at 8.5% and 10.8% in those same months. The ECB's main tool for combating inflation is increasing interest rates, which discourages borrowing and economic activity. Lagarde affirmed the bank's commitment to its 2% inflation target in the medium term and reiterated their data-dependent approach to monetary policy decisions.
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