Rising fuel prices due to the war in Iran are driving up the cost of living.

BarcelonaInflation in Spain again exceeded the target set by the European Central Bank (ECB) this June, albeit slightly, according to preliminary data on the consumer price index (CPI, the indicator that measures the evolution of the cost of living) published this Friday by the National Institute of Statistics (INE). The increase in fuel prices due to the war in the Middle East and, to a lesser extent, food prices, explains a large part of the price increase.

Thus, the prices of goods and services consumed by Spanish families stood at 2.2% higher in June than in the same month last year, two-tenths of a percentage point above the 2% that the ECB indicates as a long-term maximum. The data contrasts with those of May, when annual inflation in Spain did reach the 2% threshold and stood at exactly at this figure in Spain and at 1.8% in Catalonia.

Compared to the previous month, the cost of living rose by 0.6% in June, while it had only risen by 0.1% between April and May.

"Inflation remains contained around the ECB's reference level, while the Spanish economy remains the engine of growth among the major European economies," the Ministry of Economy emphasized in a statement. "Spain continues to enjoy a situation of stability and moderate prices, which, together with wage increases, allows households to continue gaining purchasing power," it added.

Fuel on the rise due to the war in Iran

Rising fuel costs resulting from the conflict between Iran and the United States and Israel are the main causes of the CPI increase. Israeli attacks on Iranian military and nuclear facilities—specifically with US support—and Tehran's response with bombings in Tel Aviv and other Israeli cities caused higher oil prices, which has a direct impact on the price of oil-derived products, such as gasoline and diesel. Furthermore, oil is also a necessary product for other industries, such as plastics manufacturing.

This global rise in crude oil prices is especially noticeable in Europe, which barely produces any and must import it from other countries. Iran is one of the world's leading oil exporters.

In addition, geopolitical tensions have also put the spotlight on the Strait of Hormuz, the passage between the Persian Gulf and the Indian Ocean controlled by Iran, through which a large part of the oil tankers transporting crude oil from countries such as Kuwait, Bahrain, Qatar, and Saudi Arabia pass. The Iranian government threatened to cut off maritime traffic through the strait.But so far it has not done so and the flow of oil has continued, which has prevented the price of oil from skyrocketing.

In addition to fuel, rising food prices also had an impact on the CPI, but to a lesser extent, according to the INE. Core inflation (which excludes the most volatile items, such as energy and fresh food) also rose by 2.2% year-on-year in June.

On July 15th, the state statistics institute will publish the final data—also broken down by autonomous community and product—on price developments this June.