Israel and Iran- Can energy prices rise ?

How the Conflict Could Affect Oil Prices

The Middle East is a critical region for global oil supply, particularly due to the Strait of Hormuz, through which a significant portion of the world's oil passes. Iran's involvement in this area means that any conflict involving Iran can lead to fears of supply disruptions. For instance, previous tensions have led to sharp increases in oil prices. (reuters.com, theguardian.com)

Additionally, major financial institutions have warned that escalating conflicts could lead to significant rises in oil prices. For example, J.P. Morgan has cautioned that crude oil prices could spike to $120 per barrel if the situation deteriorates further. (bloomberg.com, economictimes.indiatimes.com)

Potential Impact on the UK

Higher global oil prices typically lead to increased fuel costs in the UK. This can result in higher prices at the pump and increased costs for goods and services that rely on transportation. Moreover, rising energy prices can contribute to broader inflationary pressures, affecting the cost of living. The UK government has already issued advisories urging ships to avoid certain volatile regions, indicating concerns over potential disruptions to energy supplies. (inews.co.uk, reuters.com)

Conclusion

While the direct impact on UK energy prices will depend on the duration and escalation of the conflict, the current situation suggests that there is a risk of increased energy costs in the UK if tensions continue to rise.