Price pressures from the war in Iran could persist for up to eight months after the conflict ends, a senior minister has warned. Chief Secretary to the Prime Minister Darren Jones stated that the ongoing hostilities are likely to continue elevating costs for energy, food, and flight tickets in the coming months.
Impact of Strait of Hormuz Closure
The closure of the Strait of Hormuz, a critical shipping lane that once carried a fifth of the world's oil and gas, has driven oil prices sharply higher since the US-Israeli war on Iran began. The government has urged drivers to continue filling up their cars as usual and not to alter travel plans amid concerns over potential jet fuel shortages.
Mr Jones told the BBC's Sunday With Laura Kuenssberg programme: "You're going to see prices go up a bit as a consequence of what Donald Trump has done in the Middle East. That's probably going to come online not just in the next few weeks, but the next few months. There's going to be a long tail from this."
Duration of Economic Impact
When asked how long higher prices might persist, the minister suggested around eight months after the Strait of Hormuz is unblocked and a de-escalation of the conflict occurs. "I think our best guess is eight-plus months from the point of resolution that you'll see economic impacts coming through the system," he said.
US President Donald Trump announced an indefinite extension of the ceasefire with Iran last week, pausing most fighting. However, further efforts to end the conflict have stalled after Trump instructed his envoys not to travel to Pakistan for talks this weekend.
Government Contingency Planning
The government is intensifying planning to offset the impact, focusing on live monitoring of stock levels and addressing supply chain disruption. The Prime Minister will chair another meeting of the Middle East Response Committee, while a contingency planning group led by Mr Jones meets twice weekly.
Mr Jones said: "The Government here in the UK, the work that I'm doing with the Prime Minister is looking at all of those things and saying, 'What can we do within our power to help people to get through those difficult times?'"
Securing CO2 Supplies
The government is seeking to secure stocks of carbon dioxide (CO2), used in the food industry, breweries, defence, and medical applications such as MRI scanning. Mr Jones emphasised the importance of ensuring adequate beer supplies during the World Cup. "I raised this issue because if there is a problem with jet fuel on holidays and carbon dioxide on beer, the summer might be pretty depressing for people, but we're doing everything we can to make sure that it's not the case," he said.
Airlines and Jet Fuel
UK airlines have stated they are not currently experiencing jet fuel shortages, as they purchase fuel in advance and airports maintain stocks. However, the government said it is "closely monitoring" supplies. Airports will make it easier for airlines to cancel flights without losing allocated take-off and landing slots if fuel shortages prevent flying. The government also plans to temporarily relax laws requiring airlines to operate part-full flights from UK airports, allowing consolidation of schedules months before potential shortages.
Supermarkets and Food Supply
Supermarkets are working with the government to plan for a worst-case scenario where the war leads to shortages of CO2 used by food producers. At the outbreak of war, the government funded the reactivation of the Ensus bioethanol plant, which produces CO2 as a by-product, to shore up supplies. Steps are also being taken to weaken the link between electricity and gas prices to protect households and businesses from price spikes.
Leaked government plans outlining a reasonable worst-case scenario suggested potential shortages of certain foods if the Strait of Hormuz remains closed through the summer. The Liberal Democrats have called for a Bill in the next King's Speech to prioritise food security on the government's agenda.
