According to experts at financial firm Stifel, energy prices could increase dramatically should Iran ever act on its threat to block the Strait of Hormuz.
The Strait of Hormuz between the Gulf of Oman and the Persian Gulf is a strategically important choke point for energy shipping. Indeed, about a fifth of exports of crude oil and liquified natural gas (LNG) flow through this narrow shipping lane.
Stifel’s Chris Wheaton said that the wholesale price of gas in Europe could rise as the world competed to buy LNG shipments. He added:
“We are much more worried about European gas prices than we are about oil prices. In a UK context, that would mean a UK energy price cap of £3,000 to £4,500 a year, which would be economically and politically disastrous, in our view.”
It should be added that this may never happen, and most UK consumers would also be protected through to the end of September by Ofgem’s price cap. Nevertheless, it shows again how geopolitical events can have radical consequences for energy prices. UK consumers can gain further peace of mind by looking for deals that fix energy prices for a year or two.
Even if energy prices remain relatively stable, summer is a good time to address any efficiency issues in your home. For example, Xgas can replace an old inefficient boiler with a modern boiler installation in Wrexham, Chester and Ellesmere Port. Newer boilers should also be serviced annually to ensure efficiency, so get in touch to learn more.