Oil prices latest: Energy boss fears ‘white knuckle ride’ ahead as Trump’s Iran strikes send fuel costs soaring

Sir Keir Starmer has acknowledged concerns from homeowners and businesses about the potential economic impact of war in the Middle East.

Speaking during a visit to London, the Prime Minister said: “The government’s job is clearly to move forward, to look behind the scenes, to work with others, and the Chancellor speaks daily to the Governor of the Bank of England about what more we can do together to reduce the potential impact on people here and businesses here, looking across departments within government, assessing risks, monitoring and talking to our international partners, and of course to reduce the potential impact on people here and businesses here.”

“But it’s important to recognize that this work is necessary, because people will feel it, and I think you will too, that the longer this goes on, the greater the potential for impact on our economy, the greater the potential for impact on the lives and homes of everyone and every business.

“And our job is to get ahead of that, to turn the corner, to assess the risk, to monitor the risks and to work with others on that.”

Communities Secretary Steve Reed confirmed that, contrary to Monday’s report, the UK has sufficient oil and gas supplies. Times It claims the UK only has a two-day supply of gas.

He said: “What is happening in the Middle East is clearly extremely worrying. There is no point in trying to act as if that is the case. But the government will be monitoring the situation with oil prices very closely.”

“We’re monitoring this regularly. I don’t think there’s any cause for undue alarm yet.”

Money and Business editor Karl Matchett says:

The FTSE 100 is having a wild morning, climbing towards 10,175 points after those early losses but still down more than 1.1 per cent on the day.

It will surprise no one to see energy giants BP and Shell account for two of the day’s four biggest risers, but only 11 of the 100 companies in the index showed no green value in their share prices.

At the other end of the scale, financial firms and miners, as well as builder Persimmon, are suffering the most. After falling more than 5 percent last week, London’s main index is back to its level at the end of January, within touching distance of 11,000 points for the first time.

The price of oil broke well past the $100 mark on Monday morning and rose above $106; an increase in price of well over a third (37 percent) within a week, which promises a huge impact on people’s financial situation.

What we call oil is generally the contract price of Brent crude oil; this is the global benchmark for pricing commodities regardless of origin. Brent crude oil comes from the North Sea. Its price rises and falls in line with the supply and demand of oil, not only of its type but as a whole.

Rising oil costs will naturally increase energy bills, but this is not limited to just turning on the heating; higher fuel costs impact manufacturing, transportation, food, and everything else.

Business and money editor Karl Matchett says:

Sir Keir Starmer warned in a meeting with the public that the longer the conflict with Iran goes on “the more likely the impact on our economy is”.

An analyst from the non-profit organization Energy and Climate Intelligence Unit said Britons who drive electric vehicles could be protected from spikes in international energy markets.

Colin Walker, Head of Transport at the Energy and Climate Intelligence Unit, said: “Such an increase in the price of oil could see a liter of petrol rise to around £1.90 – a price last seen in 2022 following Russia’s invasion of Ukraine – adding over £500 to the average fuel bill for the British petrol car driver.

“But with 1.8 million EVs now on UK roads, more and more British motorists are protected from these surges in international energy markets. Accelerating the switch to electric vehicles (increasingly powered by electrons produced by British wind and solar farms) is one of the most effective things the UK can do to end its dependence on foreign oil and protect its drivers from unstable markets over which we have no control.”

Political correspondent Athena Stavrou reports:

The Utilita president warned there is a “white-knuckle ride” ahead of us as energy bosses “don’t know” how long the war will affect oil prices.

Derek Lickorish said he “couldn’t see how” the government could keep its promise to cut energy bills and said there was “huge concern” about how high gas prices could get.

Speaking about the 2022 oil price rise, Mr Lockorish told Times Radio: “Obviously not at this point because remember at the moment the war is not showing any signs of ending, there is huge concern. How high will petrol prices go? We just don’t know.”

He added: “This is going to be a difficult journey and we need to look at what we can do to improve this for our customers going forward because we thought this was a once in 100 year event if you think about 2022 and now we are having the second one in four years.”

Housing minister Steve Reed came under criticism today for refusing to deliver on Labor’s promise to cut £300 from household energy bills by 2030.

The pledge was made by the party ahead of the 2024 general election, with Ed Miliband setting the deadline for the new decade after being appointed energy minister.

The outbreak of conflict between the United States and Iran has raised doubts about this, as new pressure on global gas and oil trade has caused wholesale energy costs to rise by nearly 50 percent.

In better news for UK households, Ofgem’s April-June energy price cap was set in February, meaning bills will be effectively protected until July. The energy regulator announced a seven per cent, or £117, cut on that figure, broadly in line with Labour’s pledge to cut energy bills by £150 from the start of the new financial year by scrapping its energy efficiency plan.

Ofgem will announce its July to September cap by 27 May. Experts have warned this could be a steep increase of up to 10 per cent or £160 if tensions do not ease in the Middle East.

The increase threatens to effectively wipe out the savings Labor intends to transfer to households over the year; but in this scenario energy bills are still lower than they would be if the government made no changes.