Homes and businesses could face energy bill increases if the US-Iran conflict continues, a leading industry figure warned as oil and gas prices remained volatile on Thursday.
Shipping in the Strait of Hormuz, the entrance to the Gulf, stalled at the weekend, while Iranian retaliation to US-Israel attacks halted liquefied natural gas (LNG) production in Qatar.
The conflict could result in sharp increases in Irish electricity and gas prices if it continues, according to Sean Casey, industrials and energy industry leader at accountants EY.
Gas prices rose between 30 per cent and 40 per cent after QatarEnergy announced its shut down, as an already tight market absorbed the news.
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Stores of the fuel, used to generate about 40 per cent of Irish electricity, are already low in Europe following a colder than usual January.
Casey pointed out that Irish energy businesses have already “hedged” or bought much of what they need to supply customers in coming months.
But he cautioned that a long, drawn out conflict would lead to sustained volatility in global energy markets, which would have consequences for Irish consumers.
“How long it goes on for is critical,” he said. Casey added that industry views varied on how much time it would take for the conflict to hit energy bills here.
Russia’s invasion of Ukraine in February 2022 shut key supplies of natural gas to Europe. Irish electricity prices, already facing domestic pressures, began rising that summer.
Many Irish households’ energy bills almost doubled during the crisis that followed, prompting the Government to give credit worth €250 to each home in Budget 2025.
Natural gas prices hit €65.79 a mega watt hour (MW/h, the unit in which it is sold) on the Dutch market on Tuesday, its highest since January 2023, according to news agency Reuters. However, that eased by about €10 later.
About one fifth of the world’s LNG supplies come through the Strait of Hormuz. The EU has relied increasingly on LNG since the outbreak of the Ukraine war.
Gas storage in Europe is about 10 per cent below normal for this time of year as a consequence of the cold weather, according to most estimates.
US president Donald Trump has said the country’s navy could escort tankers through Hormuz if necessary.
Casey, a former chief executive of State utility Gas Networks Ireland, argued that the current volatility emphasised the need for the Government to follow through on its energy strategy, which includes increased the use of domestic energy, such as renewables.
[ How Iran could wage a new ‘tanker war’Opens in new window ]
That policy also includes developing a strategic national gas reserve which would give the Republic a “cushion” of several weeks supply of the fuel.
“We are on the right strategic path,” said Casey, adding that delivery should be a priority.
