War hits energy supplies: The Reengineer Monitor #63
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SPECIAL: War in the Middle East hits energy supplies
When war broke out in the Middle East this weekend, many observers immediately recognised the huge threat to global energy supplies, since roughly a fifth of the world’s oil and gas is shipped via the Strait of Hormuz – where shipping has now come to a near-standstill. In the UK, government ministers have begun discussing the possibility of stepping in to protect the public from soaring energy costs. The price of petrol, diesel and home heating oil has already risen in the UK. Many have pointed out that relying on renewables and domestically generated electricity can protect countries from supply shocks like this. However, rising fossil fuel prices can still have a knock-on effect on renewables deployment, notes Bloomberg: “Higher energy prices could spark inflation, leading central banks to raise interest rates and make it more expensive to deploy clean energy, especially since the industry is so capital intensive and sensitive to borrowing costs.”
