European Stocks Dropped as Oil Prices Fuel Inflation Concerns

European stocks were subdued on Monday as higher oil prices fueled inflation concerns and strengthened expectations that the European Central Bank (ECB) could raise interest rates later this week.

The pan-European STOXX 600 index fell by 0.1% to 649.17 points by 0711 GMT, while the Swiss benchmark index underperformed, dropping 1.2%. Germany's DAX was relatively flat.

The rise in oil prices has renewed concerns about inflation, potentially increasing pressure on central banks to maintain or tighten monetary policy. Brent crude futures rose by more than $1 a barrel after tit-for-tat strikes between the United States and Iran intensified fears of supply disruptions.

The ECB is widely expected to raise interest rates by 25 basis points on Thursday, with investors closely watching the central bank's guidance on further policy tightening.