Tehran's Parliament has voted to close the strategically important Strait of Hormuz, which could dramatically impact global oil and gas supplies. Following U.S. military actions against Iranian nuclear facilities, tensions are escalating. Analysts warn that energy bills for UK households could soar to between £3,000 and £4,500 annually if supplies are disrupted. Even with a slight reduction in energy prices announced by Ofgem, the threat of Hormuz's closure looms large, reminiscent of the price spikes experienced in 2022 during the Ukraine conflict. Analysts emphasize the crisis could mirror past economic turmoil.
"We are much more worried about European gas prices than we are about oil prices."
"If LNG production from Qatar and the UAE was disrupted, we see a repeat of 2022: European gas prices rising so LNG flows to Europe and not Asian consumers to ensure storage is filled."
"In a UK context, that would mean a UK energy price cap of £3,000-4,500 per year, which would be economically and politically disastrous, in our view."
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