THE CONFLICT IN Iraq could drive oil prices above the record price of $145 per barrel hit in 2008, Bord Gais has warned in its monthly energy price monitor.

The land grab by militant Islamic group ISIL sent oil prices up by 2% during June.

In a statement accompanying the Bord Gais energy index, power trader John Heffernan said that “with global oil demand expected to increase sharply, a complete loss of Iraqi exports would have dramatic consequences for global oil prices”.

It would not be inconceivable for prices to surpass the record high reached in July 2008…with the world having no spare capacity anywhere.

He said that traders were concerned by the nature and scale of the ISIS territorial grab. Globally limited extra production capacity means that a brake on Iraqi oil supplies would result in oil price spikes.

Gas prices remain low

Despite the hike in oil prices caused by the instability in Iraq, the low price of gas meant that wholesale Irish energy prices remained steady for June.

Overall, there was a 12% drop in the average price paid for gas, with UK stocks still very healthily stocked at 82% of capacity after a particularly mild winter led to low demand there.

Ireland sources the majority of its gas from the UK market.

The situation in Ukraine has not yet impacted gas prices, with supplies from Russia still unaffected by the dispute there.

However, Heffernan warned that the conflict in Eastern Europe could still hit Irish energy prices.

“If this dispute continues into the autumn it raises the possibility of the Ukraine siphoning off gas bound for Western Europe to satisfy rising domestic demand.”

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