OFTEC NEWS
The events surrounding the invasion of Iran will be felt for years to come. On February 28, the US alongside Israel launched a major offensive against Iran, which plunged the region into chaos. The resulting conflict has seen many attacks on energy infrastructure and shipping in the region and resulted in the closure of the crucial Strait of Hormuz. This has sent shockwaves across the global economy and pushed the price of home heating oil (kerosene) to twice the normal price. According to S&P Global Energy (Platts), the Iran war has resulted in the loss of about 16% of world supply. For our sector, a 42% reduction in global jet tradable volumes results in a loss of 37% of European jet import supply, totalling about 600,000 bpd. Ireland and the UK are particularly vulnerable as at least 40% of Europe’s jet fuel came via the Strait of Hormuz. Despite all the ‘talk’, no tankers of unsanctioned crude oil or refined products have passed through the Strait of Hormuz since the invasion started. Jet kerosene prices spiked by 87% in the days following the invasion and have remained stubbornly high since. Many pundits have indicated that we are ‘lucky’ that this war started just before the better weather kicked in as the prospect of £1-plus per litre (€1.50) would not be sustainable for consumers in the winter months. So, what’s next? Even if peace is agreed today, there are unlikely to be any cargoes of refined product from the Persian Gulf arriving in Europe for four to six weeks. This must be refined and distributed. To make the problem worse, the UK lost two important sources of domestic supply with the closure of Grangemouth and Prax Lindsey oil refineries in the last 18 months; both these facilities WITH THE COST OF HOME HEATING OIL DOUBLING DURING THE US/IRAN CONFLICT, OFTEC IRELAND MANAGER DAVID BLEVINGS ASKS WHAT’S NEXT FOR LIQUID FUELS? Energy - what’s next?
David Blevings, OFTEC Ireland Manager.
28 | PLUMBING & HEATING MAGAZINE
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