Well, we all realized that Trump bombing the crap out of Iran would cause a problem with getting oil through the Straits of Hormuz so the fact that oil prices have shot up shouldn’t really be a huge surprise. And let’s face it, Iran is a country run by a bunch of dangerous fanatics, so something need doing before they got hold of a nuke and used it…
So whether you agree with Trump or not, we’re stuck with the after effects of his action. Oil and gas prices are through the roof but actually, when you look at it more closely, they are still not as bad as when Russia attacked Ukraine.
What I have found interesting is the UK Governement’s approach to the problem – skewed, of course, by Mad Ed Miliband’s eco fanaticism. We have decades of oil and gas under our section of the North Sea. Unlike us, Norway is already exploiting the reserves that lie in their sector. We’re not and that makes no sense. Blame Miliband!
Miliband argues that the best way to proceed is to double down on renewables as that makes us less reliant on the fluctuations in the oil and gas markets. He’s quick to point out that oil prices are set by the wholesale market, but how so when it’s our oil in the first place? Surely if we dig it out ourselves and use it ourselves then it never touches the wholesalers? If not then why not? Have they never heard of bi-lateral agreements?
I can claim some knowledge of the wholesale energy market having worked for Centrica when the sector was opened up to commodity trading. Energy companies buy ahead and can engage in futures trading for energy. Basically you estimate your future requirement and buy ahead accordingly. Any change in the calculation then you can buy more or sell – even if you haven’t actually paid for it or taken delivery yet.
So if they are not profiteering why has the heating oil price rocketed? Cynically I suggest that it’s because it’s not tightly regulated like gas and oil. Even the Government admits that this needs to change but, of course, this won’t happen overnight. So while heating oil companies are making a packet, Labour just sits on its hands and makes bland statements like “we won’t tolerate profiteering” whilst the companies make hay while the sun shines.
But at least there was some good news this week. Robert Jenrick has promissed that if Reform win the next election they will remove the 5% VAT on energy. About bloody time too! We couldn’t do this while we were in the EU but remind me again how long ago was Brexit?…








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