Oil

Will Labour’s ‘visitor levy’ generate £52 million of revenue for public spending in York and North Yorkshire, as a House of Commons briefing suggests? Or will it deter holidaymakers from exploring the region I love – and every other English destination where the levy is applied – while piling adversity on a hospitality trade already caned by employment cost hikes and tight consumer wallets? Modelling by the Tax Policy Associates thinktank offers a central estimate that the proposed tax on overnight stays (at up to 5 per cent, as set by local authorities) could raise £603 million a year for the loss of 5.8 million room-nights and £689 million in overall visitor spending, roughly half from overseas.

It won’t be anything on the scale of 1973, when President Nixon imposed year round daylight saving time to reduce electricity consumption as well as a 50mph highway speed limit. Nor are we likely to see the thermostat restrictions, or the standby plans for rationing, that were introduced by President Carter in 1979.  The "oil shocks" of the 1970s were not just from a different era, they were of a different magnitude as well.  Trump may well step in with some form of oil export controls Yet that does not mean that the American economy is immune to another crisis, nor that we won’t see a dramatic response from the White House - because, in reality, the US could easily run out of oil later this year.

For a country that pumps roughly nine million barrels of oil a day – the third highest of any country in the world – Russia has managed to achieve something genuinely remarkable: it cannot keep its own gas stations stocked. More than half of its regions are now reporting shortages, the consequence of a Ukrainian drone campaign that has struck with increasing frequency and precision at the refinery infrastructure on which the country's civilian economy depends. The sometimes hours-long lines that have appeared – even in Moscow, for what may be the first time in the war – carry a symbolic weight that no amount of official reassurance from the Kremlin has managed to dispel. How this has come about is obvious enough.

A ceasefire has been agreed with Iran. The Straits of Hormuz will reopen. And the oil market will get back to normal very quickly. By Wednesday morning, it looked as if the energy crisis was over. Finance ministers will be breathing a sigh of relief as the crisis abates. But hold on. In reality, the truce is fragile, and huge amounts of supply have been taken out of the market. So long as that remains true, the price of oil, and with it the global economy, will remain stuck. The average price of $90 to $100 a barrel is not what anyone really thinks a barrel of oil is worth The price of oil has been on a wild ride ever since the United States and Israel started the attack on Iran a month ago.

Of all the parties watching the chaos in the Middle East unfold, one should be rubbing its hands together with particular satisfaction. Russia has not fired a shot in this conflict, lost no allies it cannot afford to lose and has so far gained rather a lot, with more to come. A cynic might call it the perfect war for Vladimir Putin. Moscow's public reaction has been characteristically theatrical. The Foreign Ministry denounced American and Israeli actions as a "reckless step" and a "dangerous adventure." Things have gone no further. There has been no announcement of political or military support for Iran from the Kremlin – nor is there likely to be: Russia needs its drones and missiles for Ukraine.