The possibility of the government needing to limit energy usage due to prolonged tensions in Iran has been raised by an expert. The ongoing virtual blockade of the Strait of Hormuz has severely disrupted oil exports from the Gulf, causing oil prices to surge to approximately $106 per barrel on Monday.
Iran’s threats to target tankers passing through the strait, a crucial passage for a significant portion of global oil and liquefied natural gas shipments, have raised concerns about escalating impacts with extended conflict duration.
Nick Butler, a former strategist at BP and an advisor to former Labour PM Gordon Brown, cautioned about an impending physical supply shortage in the coming weeks. He suggested that the government should prepare for a potential energy supply shortfall over the next two months, possibly requiring rationing measures.
Emphasizing the importance of oil and gas supplies for the economy, Butler urged immediate focus on existing supply availability, especially for critical sectors like healthcare and food provision. He also highlighted the need for the government to consider rationing strategies if the situation worsens.
Butler expressed apprehension about a global oil scarcity leading to international competition for resources, noting Europe’s heavy dependence on oil and gas imports. Prime Minister Keir Starmer assured that necessary actions are being taken to secure energy supply amid the crisis.
The surge in oil prices has led to a rapid increase in fuel costs for motorists, prompting government warnings against potential profiteering by fuel retailers. Additionally, new mortgage borrowers are feeling the impact of the conflict fallout, as the average fixed mortgage rates have risen over the weekend, with a decrease in available mortgage deals.