UNCERTAINTY ABOUT oil supplies as a result of stresses between the West and Iran pushed wholesale energy prices higher in January, offsetting the impact of unseasonably mild weather across Europe for the month, according to the Bord Gáis Energy Index.

The index has increased 8 per cent over the past year.

“The upwards pressure on oil prices in January was largely driven by market uncertainty regarding the implications of EU sanctions on Iran and the very tentative improvement in sentiment surrounding several major economies,” said John Heffernan, power trader at Bord Gáis Energy.

About a fifth of the world’s daily oil requirements pass through the Straits of Hormuz, meaning any blockade by Iran of this shipping channel in response to EU sanctions would have significant upwards implications on global oil prices.

Mr Heffernan said the potential for prices to fall in February as a result of the weak economic outlook in Europe could be cancelled out if the current cold snap continues and leads to a depletion in stocks of coal and gas.

Wholesale natural gas prices fell last month as temperatures were milder, pushing down demand to below-average levels for the time of year. Britain has high storage levels, which is exerting downward pressure on prices.

Electricity prices also dropped as a result of the mild weather.

The coal element of the index fell the most in January as a result of a combination of the weather and already high inventory stocks.