Oil prices latest: Starmer to meet energy bosses after brent crude soars to $115 a barrel

Later today, we’ll be hearing from the Tory leader Kemi Badenoch as she travels to Averdeen to repeat her call for the UK to drill for more oil and gas in the North Sea.

She has said: “By drilling in the North Sea and scrapping Ed Miliband’s crazy green taxes, our cheap power plan would reduce bills by £200 for everyone.”

However, her claim has been disputed by some experts, including Dr Simon Cran-McGreehin, head of analysis at the Energy and Climate Intelligence Unit.

He said: “Experts are clear that more North Sea drilling would have little if any impact on gas prices in the UK given that international events largely dictate the price. Anyone paying a gas bill after the Russian invasion of Ukraine knows that. British renewables enable the UK to unplug from this volatile international energy system, with wind lowering the wholesale power price by around a third last year.”

President Trump might be suggesting – again – that negotiations are going well and a deal could be brokered with Iran soon, but the markets aren’t falling for it this time.

Brent crude is up by more than 12% over the past week, sitting a little under $110 this morning and we’re approaching the point where this is getting economists extremely worried.

That’s not about the price of oil, of course, but it’s knock-on effects: inflation and given where some places are economically (poor employment rates, central banks not in a position to loosen, stagnant economies) the real possibilities of recession.

The FTSE 100 has started the week in marginally positive territory, up 0.2 per cent, but is now up only 0.5 per cent for the year so far having previously been flying pre-Iran.

Finance and business publication Bloomberg yesterday published a story based on interviews with oil and gas traders, executives, brokes and shippers, in which it provided an assessment on the Iran war on the supply of oil and gas across the world.

It featured a ticker that showed the number of barrels lost to the effective closure of the Strait of Hormuz in the time the article was being read; 26,500 barrels in three minutes.

The experts told the publication that if the crisis lasted more than three months, it would become a “systemic problem for the world”, leading to huge oil shortfall in the western world, as is already being seen in Asia.

The piece states: “The world still hasn’t grasped the severity of the situation…. fuel crunches hitting Asia will soon start spreading west, they [experts] said.”

The price of oil has taken the headlines with motorists in the UK already seeing the impact at the fuel pumps.

But another product impacted by the effective closure of the Strait of Hormuz is fertiliser, with about a third passing through the waterway.

Food experts fear this could lead to a hike in food prices as farmers may be unable to produce the quantity of food compared to previous harvests.

Carl Sakau, deputiy executive director of the World Food Programme,, told the Observer: “It this conflict continues, it will send shockwaves across the globe.

“Families who already cannot afford their next meal will be hit the hardest.”

Monday is also expected to see Chancellor Rachel Reeves join a virtual meeting of G7 finance and energy ministers and central bank governors along with Energy Secretary Ed Miliband.

Ms Reeves is expected to urge her counterparts to follow the UK’s lead and accelerate the transition away from fossil fuels, arguing this is the only way to get off the “rollercoaster” of international oil and gas markets and cut bills for good.

She is also expected to caution against resorting to protectionism as a response to disrupted supply chains and stress the importance of the G7 working together to maintain pressure on Russia, which is set to benefit from the higher oil price.

A government minister has denied that people will need to ration food as a result of soaring prices following the war in the Middle East.

Environment minister Emma Reynolds told Sky News: “Look, we are not asking people to ration when it comes to food. Supply of food is as normal, just as the supply of petrol is. So no, we’re not asking people to change their behaviour.”

She added: “Obviously, if we did see further increases in energy prices that has an impact, that could have an impact on food inflation, that’s what we saw with the Ukraine conflict.

“So we’re keeping a very, very close eye on that. We’re not complacent about any of these things.”

Conservative leader Kemi Badenoch will travel to Aberdeen on Monday to repeat her call for the UK to drill for more oil and gas in the North Sea.

The Conservatives have also called for a cut in VAT on domestic energy bills and the scrapping of green taxes on power generation, saying these measures will cut bills by £200.

Ahead of her visit, she said: “I know families and business owners across Britain will be very worried about how the global energy crisis will impact them. That’s why I find it appalling that Labour’s solution is to tax working people to fund a bailout for those on benefits.

“By drilling in the North Sea and scrapping Ed Miliband’s crazy green taxes, our cheap power plan would reduce bills by £200 for everyone.”

But speaking to the BBC’s Sunday With Laura Kuenssberg, Mrs Badenoch acknowledged that drilling on its own would not directly impact bills.

The government is “preparing for all eventualities” when it comes to energy supply, a minister has said, but insisted that people do not need to “change their habits”.

Asked whether the government is preparing for further energy price spikes as a result of the Iran war, environment secretary Emma Reynolds told Sky News: “Supply at the moment remains stable, but obviously we’ve got to prepare for all eventualities.

“We hope very much that this conflict can be deescalated, and we’re leading international work with allies around that. But we obviously we have to plan in case that’s not the case, which is why the prime minister, as you say, is meeting with leaders from energy companies and indeed, shipping and logistics today.

“But that is to make sure that we work constructively with the industry. We want to make sure there isn’t any market abuse, of course, but we also need to prepare for all eventualities.”

She added: “I want to just reassure your listeners that supply is stable. So we’re not advising that people change their habits, they should fill up at the petrol pump as usual, and the price cap will affect people until the end of June.”

Sir Keir Starmer will gather business leaders in Downing Street on Monday to address the impact of the Iran war.

The Prime Minister is expected to meet senior representatives from the energy, shipping and financial services industries amid warnings the UK could suffer serious economic damage as a result of the conflict.

Discussion is expected to focus on Iran’s ongoing blockade of the Strait of Hormuz, which has disrupted a vital shipping route for the oil and gas industry along with supplies of other products such as fertiliser.

The meeting will also hear an update on the situation in the region from Major General Richard Cantrill, the UK’s maritime operations commander.

It comes after the Royal Navy announced it was fitting the transport ship RFA Lyme Bay with minehunting drones, understood to be a move intended to provide ministers with options for securing the strait once the situation stabilises.

Downing Street said the aim of the meeting was to hear directly from businesses and discuss how the Government and private sector can work together in responding to the conflict.