He cited sustained drops in oil prices, lower food prices, declining underlying inflation, and anchored inflation expectations as factors supporting the favorable outlook. Potential Iranian retaliation could target shipping through the Strait of Hormuz, a critical passage for crude oil and liquefied natural gas cargoes. The country’s oil import bills climbed steeply throughout 2025, reflecting both global price pressures and dependence on foreign energy sources. The timing of the oil price surge creates a challenging backdrop for monetary policy decision making. However, sustained high oil prices could erode this cushion while simultaneously putting upward pressure on domestic prices.