Government to monitor oil prices amid war in Middle East, Tánaiste says

Sinn Féin said the Government 'need to have a contingency plan on the cost of petrol and diesel as well as home heating oil'

Most tanker owners, oil majors, and trading houses have suspended crude oil, fuel, and liquefied natural gas shipments via the Strait of Hormuz. File picture: Tasnim News Agency via AP)

The Government will monitor any potential surge in oil prices due to the outbreak of violence in the Middle East, with the opposition calling for immediate action.

Tánaiste Simon Harris said he was concerned about the price of oil and gas increasing due to the US war with Iran if there is a “supply shock”. 

Most tanker owners, oil majors, and trading houses have suspended crude oil, fuel, and liquefied natural gas shipments via the Strait of Hormuz, trade sources said, after Tehran warned ships against moving through the waterway. More than 20% of global oil is moved through the Strait of Hormuz.

Mr Harris said the Government would be monitoring the situation closely, saying there were a number of unknowns at present.

“Does this situation de-escalate relatively quickly? Is this something that goes on for a prolonged period of time? The difference between those two things economically could be very significant,” Mr Harris said.

A spokesperson for energy and transport minister Darragh O'Brien said the International Energy Agency (IEA) is "closely monitoring events in the Middle East and potential implications for global oil and gas markets".

"The oil market remains well supplied. As the situation is still unfolding, it is too early to assess the impact on energy markets. Ireland’s fuel supply chains remain robust and reliable," they said.

The spokesperson said that IEA countries such as Ireland hold over 1.24 billion barrels of dedicated emergency stocks and some 600 million barrels of industry stocks held under government obligation which can bring additional supply to market, if needed.

"Department officials continue to liaise with the IEA and are keeping the minister updated as the situation develops," they added.

Contingency plans

However, Sinn Féin finance spokesperson Pearse Doherty said the Government strategy was "not good enough".

"It is not good enough for the government to simply wait and see. They need to have a contingency plan on the cost of petrol and diesel as well as home heating oil that is ready to go if the reckless war on Iran drives up oil prices.

"The government need to immediately drop the plan to increase tax on home heating oil in May. 

"They also need to urgently be looking at contingency measures in the event of another spike in international gas prices — this cannot again be allowed to drive up electricity prices across the board."

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Asked why the Government had not condemned the US attacks against Iran, when it had condemned the Russian invasion of Ukraine, Mr Harris said there is “complexity” there.

He said there was no comparison between the Ukrainian government and the “brutal, despotic regime” in Iran, saying it had no respect for human rights, women and protest.

Mr Harris said the Government’s priority needed to be on protecting Irish citizens and working at an EU level to monitor possible impacts of the war.