[ECB Chief Economist: Iran War Will Have Lasting Impact on Inflation] Jin10 News, May 28 – European Central Bank Chief Economist Philip Lane stated on Thursday that even if the Middle East conflict is resolved quickly, the resulting energy shock could still have a lasting impact on inflation. Historically, oil prices tend to return to their original levels after a surge, but the current situation may be different, as countries are replenishing reserves or adjusting their energy structures, potentially keeping energy costs elevated. Lane remarked, 'Global oil supply has experienced a rather rapid and significant decline overnight, a situation that had previously been masked by inventories. Even as the initial energy shock begins to fade, second-round effects will persist for some time.' Lane noted that policy lessons can be drawn from past energy shocks, such as how rising energy costs can suddenly push inflation higher and trigger 'various nonlinear' mechanisms, thereby broadening the scope of price increases. 'But this is different from the nonlinear situation four years ago,' when inflation was driven up by supply disruptions caused by the Ukraine war and strong demand following the post-COVID economic reopening. Lane emphasized that central banks must acknowledge any major shocks and their potential impact on inflation but should avoid overreacting when formulating monetary policy.