Taoiseach says energy crisis is probably the worst ever

The energy shock triggered by the US-Israeli war on Iran is “probably the worst ever”, Taoiseach Micheál Martin has said, warning that the fallout could outstrip even the supply crisis of the 1970s.

Iran shut the Strait of Hormuz after the United States and Israel launched attacks on the country on 28 February.

Mr Martin made the remarks after talks with Finnish Prime Minister Petteri Orpo in Helsinki, before heading to Warsaw for a meeting with Polish Prime Minister Donald Tusk.

The discussions are part of a wider round of meetings the Taoiseach is holding with European leaders ahead of Ireland assuming the six-month Presidency of the Council of the European Union in July. He said that term would be driven by priorities around the bloc’s competitiveness, security and values.

“The supply shock is probably the worst ever, much more severe than even the 1970s supply shock.

“So, on two fronts, inflation, inflationary impacts of the war, and secondly, of course, the supply implications.

“We’ve set up a subgroup specifically to look at the supply issue and there will be ongoing advice in terms of the conservation of energy and urging people to use it as wisely as possible and that’s being kept under constant review,” he said.

In Poland, the government brought in a fuel price cap from today, with the level to be fixed each day by the Polish energy minister.

Mr Martin, however, dismissed the prospect of Ireland following suit, saying the Irish energy mix differs from that of the Polish market.

“We took one of the largest relief packages last week in terms of helping to ease the pressure that’s on people at the pump, and the fuel allowance that will benefit the most needy families.

“We have to be cautious in terms of how we intervene, but we are very concerned in terms of the secondary impacts on the economy. And that’s why we would urge that the war would end,” he said.

Micheál Martin urged people to use energy ‘as wisely as possible’

Meanwhile, Minister for Transport, Climate, Energy and the Environment Darragh O’Brien met fellow EU energy ministers in Brussels.

He said the discussions were held against what he called a “rapidly evolving geopolitical backdrop”.

Mr O’Brien also welcomed a letter from European Commission President Ursula von der Leyen “containing a toolbox of solutions for high energy prices”.

He said he was awaiting further detail next Wednesday on fresh proposals covering network charges and electricity.

“I will continue to engage with our international partners in the EU, and we must include trusted third countries like the UK in our coordination efforts,” he said.

Mr O’Brien said Ireland stands to gain from plans to ease the Gas Storage Regulation target, reducing the refill requirement for gas storage from 90% to 80%.

“Although Ireland does not have storage facilities, we see the benefit of this to reduce the demand for gas from the EU, reducing further upward pressure on gas prices for us,” he said.

EU says ‘necessary’ to reduce fuel demand to cope with energy crisis

The EU has called on member states to curb domestic fuel demand and get ready to secure oil supplies, warning that the Middle East war could leave energy prices under pressure for an extended period.

“It is clear that the more you can do to save oil, especially diesel, especially jet fuel, the better we are off,” EU energy commissioner Dan Jorgensen told a press conference in Brussels.

“We are in a situation that might worsen where indeed, demand reduction is necessary,” he added, after video talks with energy ministers from the 27-nation bloc.

The European Commission has repeatedly maintained that supplies are not currently a problem for the bloc, though it has acknowledged that elevated prices remain a serious concern.

In an effort to soften the impact of the war, EU countries have helped release about 400 million barrels from strategic reserves under International Energy Agency (IEA) coordination — the largest move of its kind.

But Mr Jorgensen said governments must now prepare for a “potentially prolonged disruption of international energy trade”.

“We need to act already now, and we need to act together,” he said.

Additional reporting AFP