Middle East shipping attacks and oil deficit trigger ECB rate hike to 2.5%

Persian Gulf and Red Sea shipping disruptions

Maritime conflict across Middle Eastern waterways has restricted transit through key energy corridors. Following the start of US and Israeli military operations against Iran on 28 February, crude flows through the Strait of Hormuz dropped from nearly 20% of global supply to roughly 75% of pre-war volume, removing approximately 5 million barrels per day from international markets. Hostilities escalated on 9 September when Iran attacked ten vessels near the Strait after US naval forces sank five Iranian tankers. In the southern Red Sea, Houthi fighters advanced to Perim Island in the Bab el-Mandeb Strait on 11 September. Freight costs for Very Large Crude Carriers loading in the Gulf of Oman bound for China reached 450 Worldscale points, equal to approximately $11.50 per barrel, according to Baltic Exchange data. Vortexa analyst Ioannis Papadimitriou addressed the shipping situation:

New clashes between the US Navy and Iran continue to push freight rates in the Gulf region to new highs.

Global oil supply deficits and energy price spikes

Supply contractions have placed upward pressure on commodity benchmarks. The International Energy Agency revised its 2026 global oil supply forecast downward to a 5.7 million barrel per day reduction (about 6%), compared to a previous estimate of 4%, while delaying full supply normalization to 2027. Global oil inventories contracted by 3.1 million barrels per day in August alone. Brent crude surpassed $107 per barrel before settling near $104 on the evening of 11 September, while European natural gas on the Dutch TTF hub exceeded 80 euros per megawatt-hour. European gas storage levels reached 67.6% heading into winter, while Greek wholesale electricity dropped to 161.58 euros per megawatt-hour on Saturday following two consecutive days above 180 euros.

Central bank tightening in Frankfurt and Washington

Persistent energy-driven inflation has accelerated monetary tightening across central banks in Europe and the United States. The European Central Bank raised its deposit rate by 25 basis points to 2.50% on 10 September, marking its third rate hike of 2026. ECB President Christine Lagarde confirmed that inflation will prove longer-lasting than previously expected. Under its updated baseline scenario, the ECB projects eurozone inflation at 3.0% in 2026 and 2.5% in 2027, with fourth-quarter oil prices at $88 per barrel. In the adverse scenario, inflation reaches 3.2% in 2027 with oil at $100 per barrel. Across the Atlantic, US headline inflation held at 3.4% in August with core inflation at 2.4%. Financial markets price an 85% probability of a Federal Reserve rate hike under Chairman Kevin Warsh, despite calls from Donald Trump for lower borrowing costs.

Financial impact on borrowers and consumers

Rising benchmark interest rates and fuel prices have increased expenses for households and enterprises. In the eurozone, the 12-month Euribor remained above 3.1% for six consecutive days, reaching 3.160% on 11 September, its highest level since August 2024. This increase is estimated to add approximately 80 euros per month (nearly 1,000 euros annually) to an average variable-rate mortgage. In Greece, the six largest commercial banks project that a 25-basis-point ECB hike increases annual net interest income by 147.5 million euros, with cumulative 2026 borrower interest burdens exceeding 110.63 million euros. At the pumps, Greek retail fuel prices on 10 September averaged 2.120 euros per litre for 95-octane petrol and 2.077 euros for diesel.