Brent crude prices retreated in early trading as geopolitical tensions in the Middle East showed signs of de-escalation, removing a key risk premium from energy markets.
The pullback in oil costs is expected to flow through to consumer price indices globally, providing relief to central banks monitoring inflation trajectories.
The Bank of Korea highlighted the impact of lower crude oil prices in its latest assessment, noting that inflation is expected to ease in July compared to the previous month.
The central bank pointed to both the decline in energy costs and government efforts to stabilize consumer prices as primary drivers behind the anticipated softening of inflationary pressure.
This development aligns with broader trends observed in other major economies.
Recent data from Germany showed consumer price inflation easing to 2.3% year-on-year in June, down from 2.6% in May, largely driven by a sharp decline in oil prices.