Middle East tensions pose the biggest threat to rate cuts, European Central Bank policymaker says

Tensions in the Middle East pose the biggest threat to a prospective interest rate cut from the European Central Bank, according to ECB policymaker Robert Holzmann.

"At this stage, I think the biggest threat is geopolitics, because we have seen what's happened in the Middle East," Austrian central bank Governor Holzmann told CNBC's Karen Tso on Wednesday. His comments came on the sidelines of the International Monetary Fund Spring Meetings.

"As you can imagine, only when a boat is sunk in the [Strait] of Hormuz and you may have a different oil price, and this of course may require us to rethink our strategy," he added.

Holzmann singled out ramifications for energy prices as the single most important factor in terms of Europe's fight to tame inflation. He added that an abrupt rise in oil prices, for example, would constitute a "major, major shock."

His comments echo the view of ECB policymaker Olli Rehn, who on Tuesday said the likelihood of a June rate cut hinged upon inflation falling as expected, noting that the biggest risks to monetary policy stem from Iran-Israel tensions and the Russia-Ukraine war.

"The biggest risks stem from geopolitics, both the deteriorating situation in Ukraine and the possible escalation of the Middle East conflict, with all their ramifications," Rehn, who serves as the governor of the Bank of Finland, said in a statement. "As summer approaches we can start reducing the level of restriction in monetary policy, provided that inflation continues to fall as projected."

Israeli forces have pledged to respond to Iran's large-scale air attack on Israel on Saturday. World leaders have called for the "utmost degree of restraint" in the aftermath of the offensive.

Oil prices were lower on Wednesday afternoon