The possibility of energy rationing due to prolonged conflict in Iran has been raised by an expert. Disruption in oil exports from the Gulf due to a virtual blockade of the Strait of Hormuz has led to a significant increase in oil prices, reaching approximately $106 a barrel in early trading on Monday.
Iran’s threats to attack tankers passing through the strait, which serves as a crucial route for a fifth of the world’s oil and liquefied natural gas, have escalated concerns as the conflict continues. Nick Butler, a former BP strategy executive and advisor to former Labour PM Gordon Brown, cautioned that there could soon be a tangible shortage of supply.
With potential shortages looming, Prof Butler emphasized the need for the UK government to consider rationing energy in critical sectors like healthcare and food supply. He underscored the importance of exploring existing supply resources while advocating for the development of new oil fields in the North Sea as a long-term solution.
The global oil shortage could trigger competition among countries for limited supplies, affecting Europe, which heavily relies on oil and gas imports. In response to the rationing concerns, PM Keir Starmer assured that necessary measures are being taken to ensure adequate energy supply.
The surge in oil prices has resulted in a rapid increase in fuel costs for motorists, prompting government warnings against potential profiteering by fuel retailers. Additionally, the conflict’s aftermath continues to impact new mortgage borrowers, with average fixed mortgage rates rising over the weekend and the number of available mortgage deals decreasing.