CCNI’s head of energy policy Raymond Gormley believes oil prices will remain high until peace negotiations between the US and Iran resume.
Brent crude – the global benchmark for oil prices – rose more than 6% on Thursday following several days of increases as the US stepped up military strikes against Iran.
Prices spiked after Houthi militia in Yemen attacked oil tankers in the Red Sea, threatening a key export route that Saudi Arabia has used to bypass the Strait of Hormuz.
In Northern Ireland, there have been increases of about 42.86% (£152.82) across 300, 500 and 900 litres of home heating oil orders since 26 February.
Gormley explained prices spiked dramatically at the beginning of March and peaked on 9 April with recent price movements trending downwards until the end of June.
However, since early July oil prices have been “creeping upwards until the middle of the month then stagnating”.
“Prices had reached a four-month low up until the end of June, but since July we have seen prices rise again in response to the escalation of fighting between the US and Iran that has disrupted key oil-producing and shipping routes,” said Gormley.
“With oil supply under pressure and increasing uncertainty, the cost of heating oil is likely to continue to remain high until peace negotiations resume.”
The price of oil sank more than 9% on Monday on hopes that a pause in attacks between US and Iran could help lead to a resolution to the conflict.
Brent crude, the global benchmark for oil, dipped below $88 (£66) a barrel, marking a sharp turnaround from last week when it had risen above $100.
The fall came after the US ambassador to the UN said attacks on Iran had been halted for a second night in a row to give “talks some space”.
An Iranian army spokesperson said on Sunday that Tehran had halted “retaliatory” attacks in the region in response.
The outbreak of the Iran war triggered a sharp rise in oil prices as the conflict led to the effective closure of the Strait of Hormuz, a key shipping route which usually carries about 20% of the world’s oil and liquefied natural gas (LNG).
When Iran and the US signed a memorandum of understanding in June to halt military operations and reopen the strait, the price of oil fell back to pre-war levels of around $70 a barrel.
However, the collapse of the ceasefire earlier this month reignited fears over global energy supplies and pushed the oil price back up.
Last week it hit $100 a barrel for the first time since May, with added concerns coming after Houthi militia in Yemen attacked oil tankers in the Red Sea, threatening a key export route that Saudi Arabia had used to bypass the Strait of Hormuz.
