European Central Bank (ECB) Vice President Boris Vujčić has warned that the ongoing escalation of Middle East conflicts is posing a core risk, namely that energy prices will remain elevated over a longer period and could further transmit into broader inflation areas.

Vujčić explicitly stated: "The core risk right now is precisely that 'energy prices will remain elevated for a longer period.'" He noted that financial markets share this assessment as well, saying, "That is exactly why we are seeing this kind of repricing adjustment in the yield curve." This statement indicates that the bond market has begun incorporating energy supply constraints under geopolitical shocks into its medium- and long-term interest rate pricing framework, rather than treating them as purely short-term disturbances.

Vujčić also mentioned concerns about insufficient global refining capacity. He said: "It is now very clear that for the foreseeable future, it will be difficult for us to see refining capacity return to the levels seen before this conflict broke out." He further explained the cascading impact of this supply-side constraint on prices: "This is precisely the reason why energy prices, especially diesel prices, are likely to remain elevated for a long period and further transmit into inflation — after all, diesel is in fact widely used in the production and transportation of numerous products." This analysis reveals the structural characteristics of the current inflation risk: unlike short-term fluctuations in crude oil prices, the physical bottleneck in refining capacity means that even if crude oil prices fall back, the tight supply situation for refined products, particularly diesel, may persist, thereby exerting sustained pressure on downstream commodity prices through logistics, transportation, and production cost channels.