The UK is bracing for a sharp increase in household energy costs as escalating military conflict in Iran imperils global oil supplies. Brent crude surged past $90 a barrel today, the highest level in six months, amid fears that the Strait of Hormuz could be partially blocked. This chokepoint handles approximately 20% of the world’s petroleum. For British consumers still reeling from the cost-of-living crisis, this is an unwelcome dose of physics: energy markets are a global system, and local calm does not insulate us from distant shocks.
The trigger for this crisis was an exchange of strikes between Iran and allied proxies against Saudi and Israeli infrastructure. The Strait of Hormuz, a narrow 33-kilometre channel between the Persian Gulf and the Gulf of Oman, is now effectively a war zone. Insurance premiums for tankers have quadrupled, and several major shipping lines have suspended transits. Even a temporary 10% disruption to flow would remove over 2 million barrels per day from a market already tight due to OPEC+ production cuts.
For the UK, the maths is simple but painful. Household energy bills are still heavily influenced by wholesale gas prices, which track oil due to oil-linked contracts and market sentiment. Ofgem’s price cap is calculated quarterly based on wholesale energy costs. The current cap, set for January to March, is £1,928 per year for a typical dual-fuel household. Analysts at Cornwall Insight now project that the cap for April to June will rise to £2,100, with further increases likely if the crisis deepens. This is not speculation; it is arithmetic.
The government’s own energy strategy acknowledges the need to insulate Britain from global price volatility. Yet wind and solar, despite being domestic and cheap once built, remain a minority of generation. The UK still imports about 50% of its gas, and much of that comes from Norway and via LNG from the global market. If the Iran conflict cuts supply, prices will adjust everywhere. There is no national bypass to thermodynamics.
The longer-term solution is accelerating the transition to electrified heat and transport powered by renewables. The UK’s offshore wind capacity is among the best in the world, but the current grid simply cannot absorb enough of it without massive investment in storage and interconnection. The irony is that every dollar spent on fossil fuels today props up the very volatility that bankrupts households. Saudi Arabia and Russia have used this leverage for decades. Iran now joins them.
What can British households do in the immediate term? Not much. The Treasury may reintroduce some targeted support, but fiscal headroom is limited. The energy price guarantee, which capped bills during the worst of the 2022 crisis, was phased out. A winter fuel payment for pensioners remains, but millions of working-age households are exposed. The most effective personal step is to reduce demand: turn down thermostats by 1°C, insulate lofts, and draught-proof windows. These actions produce small but cumulative savings.
This crisis should be a wake-up call. Every delay in building clean energy infrastructure locks in dependence on the next geopolitical flare-up. The UK has pledged to decarbonise its power sector by 2035. That deadline feels ambitious but not impossible. However, it requires planning decisions now for solar farms, wind turbines, and grid connections that take years to permit. The Iran war is a reminder that the climate is not the only source of existential risk. Energy security and climate action are two sides of the same coin.
As I write this, diplomacy is underway at the UN. But the Strait of Hormuz remains tense. Tankers sit idle. British billpayers wait. The numbers are not yet catastrophic, but they are trending in one direction. And unless we break our addiction to volatile fossil fuels, this story will repeat. The question is whether we will learn the lesson before the next crisis hits.
