War in Iran Drives Energy Costs, Strains Construction and Monetary Policy

The conflict in Iran is rippling through global economies, driving up energy prices and material costs. In Spain, construction associations are urgently requesting government intervention as material prices soar—bituminous products for asphalt have risen 52%—mirroring the post-Ukraine invasion spike. The sector warns that projects are becoming unviable without a price revision mechanism similar to 2022's Source: La Vanguardia.

Simultaneously, the disruption of shipping through the Strait of Hormuz, through which about a fifth of global oil and LNG passes, is feeding inflation in the Eurozone. The ECB faces pressure to raise interest rates for the first time since September 2023, with the Euribor 12-month rate climbing to 2.79%. However, economists debate the effectiveness of rate hikes against supply-side shocks, noting that the Eurozone economy is weakening, with growth forecasts trimmed to 0.8% Source: El Confidencial.

In the United States, President Donald Trump claimed gas prices are 'not very high,' but data shows the national average of $4.16 per gallon is higher than during 91% of the Biden administration. While below the 2022 peak of $5.02, current prices are $1.04 above the level when Biden left office. Trump's anecdote of $1.85 gas in Iowa is contradicted by state averages of $2.57 Source: CNN Español.