Just two weeks after the start of the US and Israeli strikes on Iran, natural gas prices in the EU have already surged by up to 90% and oil prices by around 40%.
London does not depend directly on supplies from the Middle East and Britain’s natural gas supply is primarily sourced from both North Sea domestic production and extensive pipeline imports from Norway. However, any disruption, delay, or accident in the supply chain could have a damaging impact on the country’s economy – already battered in recent years by the lack of an adequate political course and a succession of government resignations.
The crisis is gaining momentum
The Persian Gulf states have already significantly reduced oil production, and according to Qatar’s Energy Minister, the Gulf region could come to a halt “within weeks”. The Strait of Hormuz is effectively closed. Reports are emerging that it has been mined.
Even if this information is untrue, the reluctance of international companies to insure tankers and the real threat of being struck are unlikely to allow for a prompt restoration of movement. Russia, which used to supply about 40% of the EU’s pipeline gas, has also stated that it may halt its gas supplies to the European market amid the energy spike.
Not just the Middle East
For the time being, the conflict remains localized within the Middle East region. However, conditions are emerging that could allow the flames to spread to the neighbouring South Caucasus. Given the possible involvement of Azerbaijan, instigated by Israel and the geopolitical ambitions of President Aliyev in the Iranian conflict, the stable supply of Caspian energy resources to Europe, could also cease.
Following Azerbaijan’s victory in Nagorno-Karabakh, Baku considers itself indebted to the United States and Israel. Moreover, lingering territorial disputes could prompt it to turn a blind eye to additional threats to the energy market. In this case, Britain, the country most dependent on oil imports, cannot avoid a total energy collapse.
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