The Taoiseach has warned companies against price gouging as energy prices rise sharply due to the escalating conflict in the Middle East.
Shipping through the Strait of Hormuz, the vital route between Iran and Oman that handles about one-fifth of the world’s oil consumption along with substantial amounts of liquefied natural gas, has almost completely stopped. This followed attacks on vessels in the area after Iran’s retaliation to strikes by the US and Israel.
These disruptions, combined with fears of a longer-term closure, have driven up oil and European natural gas prices. Brent crude futures rose nearly 10% this week, as the conflict led to several oil and gas production shutdowns across the region.
Micheál Martin urged businesses not to exploit Irish consumers unfairly. Before a Cabinet meeting, he stated there was no justification for fuel price increases at pumps the previous day or elsewhere, since Ireland sources its oil from the North Sea.
He noted that officials had met with the Competition and Consumer Protection Commission the day before and asked it to investigate the energy sector for any unfair pricing practices.
He also cautioned that prolonged conflict would bring broader economic consequences.
The International Monetary Fund is closely watching the Middle East situation, highlighting disruptions to trade and economic activity, spiking energy costs, and greater financial market volatility. It added that it is still too soon to gauge the full regional or global economic fallout, which will hinge on how long and how intensely the conflict persists.
Ireland is more vulnerable to natural gas supply issues than to oil disruptions, according to Professor Lisa Ryan, a UCD expert in energy economics.
She explained that Ireland draws much of its gas and oil from the North Sea via the UK and Norway, so Strait of Hormuz problems should not immediately hit local oil supplies. On RTÉ’s Morning Ireland, she pointed out that European natural gas prices surged 33% the previous day.
This spike ties partly to the Strait, through which liquefied natural gas flows to Europe from the Middle East. Qatar Energy, responsible for around 15% of Europe’s LNG, has halted operations.
She noted that oil prices in Ireland should not have risen right away, as companies typically hold significant storage, buy ahead, or hedge contracts, creating a usual delay before global changes reach consumers.
However, the immediate increases suggest companies anticipate a prolonged shortage and are preemptively raising prices.
While Ireland does not import oil directly from the Middle East, European markets are linked. Disruptions there make European-sourced oil costlier as buyers seek alternatives.
She described oil prices in Europe as relatively stable overall but emphasized greater concern over natural gas. European storage levels sit at about 30%—typical for late winter after heavy seasonal use—and Ireland relies heavily on imported gas.
Since Russia’s invasion of Ukraine, Europe has leaned more on Middle Eastern LNG, amplifying the current impact on gas prices.
Tell us your thoughts in the Facebook post and share this with your friends.
