Oil Price Surge Weighs on European Stocks Ahead of ECB Rate Decision

European stocks were largely unchanged on [no date mentioned] as oil prices rose following new clashes between the US and Iran, which disrupted shipping near the Strait of Hormuz. This development has kept inflation concerns in focus ahead of the European Central Bank's (ECB) rate decision on Thursday.

The STOXX 600 index barely budged because investors are trying to weigh two opposing forces. On one hand, higher Brent crude prices benefit oil and gas producers, lifting the energy sector. On the other hand, pricier fuel can quickly show up in headline inflation, making it harder for the ECB to signal an early end to tight policy.

Even a $1 move in Brent can be significant this week, as markets already expect a 25-basis-point hike. Hotter inflation worries can keep expectations for rate cuts further out, feeding into higher borrowing costs and raising the discount rate investors use to value future corporate profits.