Energy prices could rise sharply this autumn if Iran war continues, minister warns

Enterprise Minister warns prolonged Middle East conflict could disrupt supply chains and drive up Irish energy costs later this year

Enterprise Minister Peter Burke speaking to the media ahead of a Cabinet meeting at Government Buildings in Dublin. Picture: PA

There could be “very significant” increases in energy prices this autumn if the war in Iran continues, enterprise minister Peter Burke has said.

Speaking ahead of the Labour Employer Economic Forum on Friday, Mr Burke said the political shock arising from the US-Israeli war in Iran is worse than the fuel crises of the 1970s and the war in Ukraine combined.

Mr Burke said the State is facing “very difficult circumstances”, pointing to pressure on fuel prices linked to the conflict.

“A lot of the gas infrastructure, energy infrastructure has been disrupted in the Middle East. Much of the LNG plants have been damages, they’re not operating right now and that’s going to present a challenge in the autumn,” Mr Burke said.

“We are going to see in the autumn, potentially if things keep going the way they are, very significant increases in energy. That has a big impact on the economy.”

Mr Burke said the price of a barrel of crude oil could rise significantly if disruption continues in the Strait of Hormuz.

The enterprise minister referred to warnings by the International Energy Agency over jet fuel supplies, saying this is a particular concern for Ireland given the country’s reliance on kerosene.

“We know that, essentially, kerosene is a sister of jet fuel. They are almost one in the same and Ireland relies on kerosene more so than any European country to heat homes right across the economy,” Mr Burke said.

“That’s going to be a big challenge.”

Mr Burke said the Government needs to be “honest” about the challenges posed by the ongoing US-Israeli war in Iran.

“We cannot eliminate all the impact of this international crisis. We can mitigate, we can cushion some of the blows, we can absorb them as much as we can as a government, but we can’t eliminate them.”

The Enterprise Minister said the Government cannot predict how long the conflict will last.

“That’s why we need a strong economy to protect its citizens and the Government will have to be measured and proportionate over the coming months to ensure we mitigate the risk of inflation, because inflation is the big bite that people feel when they’re buying their groceries.”