The Iran war has already wiped out 500million barrels of global supply. Stockpiles are shrinking fast, and we’re running down what’s left. The crucial Strait of Hormuz remains closed, choking off a fifth of the world’s oil and gas. Even if it reopens, it will take months to catch up. Energy infrastructure across the Middle East has taken a hammering. Repairs could take years. And summer is coming.
Inflation was supposed to fall to 2% this spring. Instead, it hit 3.3% in March and is heading higher. Petrol and diesel costs are climbing, with the oil price back up to $100 a barrel. Some analysts reckon it could soon hit $130. For now, there are no fuel shortages in the UK. But if Donald Trump fails to find a way out of this crisis, they could be just weeks away. And that puts our holidays at risk.
Fatih Birol at the International Energy Agency says this could become the biggest energy crisis ever. He warns flight cancellations could come “soon” if supplies stay tight. Japan, South Korea, China and India rely heavily on Middle East oil. They’re on the frontline of the coming crisis. Europe is next.
The cancellations are starting. SAS has axed 1,000 flights this month. KLM, Lufthansa, United Airlines, Air New Zealand, Asiana and Cathay Pacific are all trimming schedules. British Airways, Jet2, easyJet and Ryanair haven’t cancelled flights yet, but they’re warning disruption could hit at any moment.
Amena Bakr at energy intelligence firm Kpler has just issued a stark warning. She says much of the oil we’re using today was shipped before Trump attacked Iran on February 28. We’re now “entering the red zone of supply losses”. Her conclusion is brutal: “You can forget about your summer holidays.”