Why surging oil prices aren’t yet worth worrying about

For once we are having an old-fashioned silly season, with no pandemic, no insurgency by the Taliban, no leadership election in the Tory party and no energy crisis – with the result that a few migrants moving onto a barge has become the main story of the week. Or at least we didn’t seem to have an oil crisis until Tuesday, when European wholesale gas prices suddenly surged by 40 per cent, from €30 per MWh to over €40 per MWh. It was a reaction, it seems, to a strike in Australia which has compromised the country’s exports of liquified natural gas (LNG). Since the Ukrainian invasion, Europe has become increasingly dependent on LNG imports by ships, and while few of them emanate from Australia (the US and Qatar are the main sources), we are still exposed to international markets.

Various voices have warned over the past few months to beware of renewed energy crisis this winter: that we are far from being out of the woods.