Hope that rapid end to Iran war will cool oil prices for Northern Irish consumers - but 'impossible to rule out a year of this'
There is hope that a rapid end to the Iran war, as suggested by Donald Trump, could see oil prices return to normal – though a Northern Irish economist says he cannot rule out prices remaining high for the next year or so.
Esmond Birnie was speaking as the price of home heating oil in the Province – the fuel which keeps about 60% of the Province’s households warm – fluctuated today, with some suppliers raising their prices and others lowering them, but with little sign of a reversal of the roughly 80% hike since the war began on March 6.
There were renewed calls from the Province’s politicians for action from the UK government to ease the burden this is putting on Northern Irish households.
It comes as US war secretary Pete Hegseth said today would be the “most intense day of strikes inside Iran”, while Donald Trump said it was “going to be a short-term excursion”.
A day earlier, Mr Trump had said the war was “very far ahead of schedule,” and that “I think the war is very complete, pretty much”.
Brent crude, the international standard, had spiked to nearly $120 on Monday, but today fell back to around $90 (nearly 24% higher than when the war started).
Meanwhile, Iran’s parliament speaker, Mohammad Bagher Qalibaf, said that Iran was “definitely not looking for a ceasefire”, adding: “We believe that the aggressor should be punched in the mouth so that he learns a lesson so that he will never think of attacking our beloved Iran again.”
Iranian drones attacked Kuwait, Saudi Arabia, the UAE, Israel, and Bahrain.
Amid all this, the News Letter is continuing to monitor the price of home heating oil in the Province, which remains well above £1 per litre.
Following Russia’s invasion of Ukraine there was a similar spike, and the price kept on jumping above £1 per litre for over a year afterwards before settling down.
Dr Birnie, a senior Ulster University economist and ex-UUP MLA, said everything hinges on the question “will it be long or a short war?” – and that in turn is “dependent on the decision-making of the American preisdent”.
"If the rumours he’s indicated of ‘I am about to stop’ are correct, I suspect the prices would go back to $80 or $75 a barrel, back to where they were – then home heating oil and petrol pump prices would come down,” said Dr Birnie.
"But we’re getting contrary indications from the administration – indeed, from the Iranians too of course – that this might go on much longer and inflict more damage in terms of oil capacity, refineries around the gulf, and the shipping lane.
"It remains very uncertain at the moment, alas.”
Is there a prospect of home heating oil staying above £1 a litre for the next year or so – as happened after the Ukraine invasion?
"I will say that I hope not – but you can’t rule it out,” he said.
"It could happen. My instinct is probably the American and Israeli air war will end fairly quickly and global production and districution will wind back to where it was.
"But we just don’t know. Which is difficult for indivuduals and businesses, but it is the way it is.”
A supplier whose prices the News Letter has been monitoring in north Down dropped its price for 500 litres of home heating oil from £621 on Monday to £615 today, while one in north Armagh dipped from £585 to £574.
However one supplier in south Tyrone raised its price from £580 to £599.80.
Three other firms, in west Fermanagh, mid-Antrim, and Londonderry city, kept their prices the same.
On Monday DUP MP Carla Lockhart had called for the government to remove the 5% VAT that exists on home heating oil.
And today Stormont’s finance minister and economy minister both called for direct support from the UK government to people in Northern Ireland.
Finance minister John O’Dowd said the Stormont Executive does not have the financial “firepower” to fund any relief scheme, and that the cost of any such initiative could run into hundreds of millions of pounds.
Chancellor Rachel Reeves has already acknowledged the “unique issues” around heating oil.
Treasury minister Lord Livermore is meeting with MPs, including some from Northern Ireland, today to discuss the issues.
The proportion of homes in GB that use oil is comparitively tiny – thought to be under 5%.
Mr O’Dowd said he had written to the Chief Secretary to the Treasury James Murray to ask for direct engagement with the Stormont Executive, “it is vitally important that support comes from Westminster”.
Caoimhe Archibald, the economy minister, said following Russia’s invasion of Ukraine there were “a series of financial support schemes” put in place by the London government, and that “given the scale of the current price shock, it is essential that similar options are examined urgently”.
She added: “Households and businesses here must not be left to bear the brunt of these costs.”