Harris warns Europe must be ready to act as Middle East war drives oil price volatility

Tánaiste says Ireland is closely monitoring fuel costs as Middle East conflict drives volatility in global oil markets

Motorists have also seen diesel prices hit €2 per litre in many filling stations, up from an average of €1.72 just a few weeks ago.

Tánaiste Simon Harris has vowed the Government will continue to keep fuel and oil prices under review despite a recent fall in costs.

Speaking in Brussels at a meeting of EU finance ministers, the Fine Gael leader said that if the ongoing war in the Middle East “doesn’t end quickly”, as
suggested by US president Donald Trump, “Europe and member states have to be ready to act”.

On Monday, Mr Trump predicted the war in the Middle East could end soon, even as Iran’s hardliners staged a show of loyalty to Ayatollah Mojtaba Khamenei, signalling the regime was unlikely to back down soon.

The price of oil recently surged past the key $100-a-barrel mark, with the conflict triggering a sharp rise in the price of home heating oil across Ireland.

Motorists have also seen diesel prices hit €2 per litre in many filling stations, up from an average of €1.72 just a few weeks ago.

However, oil prices fell by around 7% on Tuesday morning following Mr Trump’s suggestions that the conflict is “pretty much” over.

Speaking in Brussels, Mr Harris welcomed the drop in prices but said the Government continues to keep the situation under review.

“We've seen oil prices, at least [on Tuesday morning], fall back on where they were [on Monday],” he said.

“In many ways, that's a stark reminder of the volatility of the situation. As we've consistently said in Ireland, as we say in Europe as well, the length and the depth of this crisis will have a very material impact on the economic effect of the crisis as well.

“We continue to monitor this very closely, very carefully. The Irish government keeps everything under review.

“But the fact that oil prices have fallen so significantly [on Tuesday morning], is a reminder of the volatility.” 

Mr Harris said that despite the fall in prices, the European Central Bank (ECB) and the European Commission must provide member states with ongoing “macroeconomic analysis of the situation”.

He continued: “It's a very different economic scenario if this conflict goes on for months and months on end.

“I know President Trump's comments [on Monday] suggested that their objectives are nearly complete. We didn't get much more detail around that.

“But this is a very different economic situation, in the words of the Commission, it becomes more benign if it ends quickly.

“But if it doesn't end quickly, Europe and member states have to be ready to act, and certainly in Ireland, we keep everything under review.” 

Mr Harris also said Europe has not learned enough from the energy crisis triggered by Russia’s invasion of Ukraine in 2022, noting the bloc was “far too reliant on other parts of the world when it comes to our energy”.

He warned the current crisis in the Middle East should serve as a “sharp reminder and wake-up call” about the need for greater European energy independence.

However, the Tánaiste dismissed suggestions from Russian president Vladimir Putin that Russia could conditionally supply oil and gas.

He warned that Putin and Russia benefiting “financially from a moment of conflict and pain and trauma in the Gulf region would be utterly despicable”.