The tentative ceasefire agreement between Washington and Tehran, signed electronically by senior officials including US President Donald Trump and Iran’s parliamentary speaker, has kindled hopes of a swift normalisation in global energy markets. Yet within hours of the announcement, Bundesbank President Joachim Nagel struck a markedly cautious tone, warning that the reopening of the Strait of Hormuz—the critical chokepoint for Middle Eastern crude—would not bring immediate relief to the eurozone’s stubbornly high inflation. Speaking at a financial summit in Frankfurt, Nagel acknowledged that the contours of a truce were taking shape, but stressed that even if tanker traffic resumes in the near term, it will take months before oil supplies return to pre-war levels.

Viewed from Paris, European Central Bank President Christine Lagarde offered a warmer reception, calling the preliminary pact unequivocally good news if confirmed by a formal memorandum of understanding. Her remarks reflected the initial market response: crude prices fell sharply and traders scaled back bets on aggressive ECB rate hikes. However, Nagel’s intervention from Frankfurt injected a note of sobriety. He detailed how production facilities across the Gulf region have suffered damage or been taken offline entirely, while strategic reserves have been drawn down heavily during the conflict that erupted in late February. “Even if the Strait becomes navigable again soon,” he said, “it will take months for supply to normalise.”

Beyond the physical constraints on oil output, Nagel flagged a second inflationary risk. The fiscal measures that many European governments introduced to shield households and businesses from soaring energy costs—subsidies, tax cuts, and price caps—are not permanent. Should these supports be unwound before underlying supply fully recovers, price pressures could spike anew, compounding the challenge for monetary policymakers. The war-driven energy shock has already slowed growth across the eurozone and pushed inflation well above target, a dynamic that analysts in London note has left the ECB navigating a particularly delicate trade-off between taming prices and supporting a fragile economy.

From Moscow, the view is that the repercussions of the oil price surge will continue to ripple through the global economy regardless of the diplomatic breakthrough. Russian financial commentary has highlighted that the electronic signing of the accord by US and Iranian officials, while a positive step, does not instantly repair damaged extraction and transport infrastructure. Meanwhile, in Brazilian financial circles, the focus has been on the ECB’s next moves: Nagel made clear that all options remain on the table for the upcoming monetary policy meeting, leaving the door open to further rate action if inflation proves stickier than markets now anticipate.

Nagel’s caution serves as a reminder that geopolitical ceasefires do not automatically unwind economic damage. Even as the Strait of Hormuz reopens, the legacy of disrupted supply chains, depleted inventories, and lingering uncertainty will keep energy costs elevated well into the second half of the year. For the ECB, the path to restoring price stability remains fraught, and any premature easing of monetary policy could quickly unravel hard-won progress. The coming months will test whether the tentative peace can translate into a durable disinflationary trend—or merely offer a brief respite before underlying pressures reassert themselves.