Yordan Bozhilov: Peace Deal between Iran and the United States Expected to Positively Impact Energy Prices and Inflation

“The agreement is fragile, but a peaceful resolution of the conflict will have a positive impact on energy prices and inflation,” said Yordan Bozhilov of the Sofia Security Forum, commenting on the implications of a peace deal between Iran and the United States for Europe and Bulgaria.

“First of all, this agreement moves further away the idea of a large-scale war in the region. We can already see markets reacting positively to the reopening of the Strait of Hormuz. However, the agreement is so fragile that we hope no external factors will affect it. Europe is one of the winners from a peaceful, and as long-lasting as possible, resolution of the issues affected by this war. Europe has an interest in reopening trade routes, Europe has an interest in lowering and regulating prices, especially as we enter the holiday season and peak tourism period. Europe has an interest in security, and this agreement will also reduce potential migration waves, should there be escalation rather than normalisation.”

“Bulgaria and our economy have suffered an external shock, particularly in terms of energy prices.”

“For Bulgaria, a peaceful settlement is extremely important, mainly because it will have a positive effect on energy prices and, consequently, on inflation. All of this should have a positive impact on our economy. As I said, it will also have a positive effect on security, as it will reduce the risk of potential migration waves. I also think this agreement will have a positive effect on the conflict that affects us most directly, namely the war in Ukraine. On the one hand, lower oil prices will reduce Russia’s revenues for waging this war. On the other hand, it seems to me that more international actors will focus on seeking a solution to the war in Ukraine. Another issue facing Europe, linked to both conflicts, is Europe’s role. Will Europe provide forces to act as guarantors of peace in Ukraine after a peace agreement is reached, but also in the Middle East, as requested by President Trump from European partners?”