The UK government has revised its internal crude oil price forecast upwards, judging that even if a peace agreement is reached between the US and Iran, international crude oil prices may persistently remain around $100 per barrel until 2028, influenced by a prolonged recovery cycle for crude oil shipping capacity in the Persian Gulf.
Revised Forecast and Economic Implications
This latest, not-yet-public analysis report warns that upward pressure on energy prices will be more persistent than previously assessed, further deteriorating the global economic outlook. The UK government initially estimated that the energy market would face only about six months of disruption after the conflict's end, with a swift recovery in crude oil shipments from the Persian Gulf. It has now revised this judgment, suggesting the recovery period for crude oil supply from the region may extend to 14 months.
Political Challenges for the UK Government
If this forecast materializes, it would severely impact the policy implementation pace of Prime Minister Keir Starmer's cabinet. The government is striving to fulfill its election promise to voters of lowering the cost of living.
Global Economic Impact
Beyond the UK, nations worldwide will also have to confront issues of rising costs for energy, food, and fuel shortages, with the global economy facing widespread repercussions.
Domestic Economic Outlook
The report points out that domestically, the UK's new Prime Minister will need to manage a weakening economic situation for an extended period this year.
Political Landscape and Potential Leadership Challenge
There is a widespread perception that the Starmer government is on the brink of collapse. If Greater Manchester Mayor Andy Burnham wins the parliamentary by-election on June 18, he is expected to launch a challenge for the party leadership this summer.
Government Response
A UK government spokesperson issued a statement noting that the UK's energy supply structure is diverse and resilient to risks. The government is working with international partners to seek a long-term solution to the Iran crisis, aiming to minimize pressure on the public's livelihood.
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