Tom Fairless

The oil price might go up by between 5 and 40 cents per barrel as a result of a one or two dollar charge.

If you think that because of these problems in the Strait of Hormuz, the oil price has risen 30, 40, 50 dollars a barrel.

That's peanuts.

If this arrangement, this toll booth in the Strait of Hormuz were to be institutionalized and Iran was allowed to do this, say charge one or two dollars per barrel of oil flowing through, economists say most of the burden would actually be taken by the Gulf states.

And the reason is essentially that it's a global oil market.

And the Gulf producers, once they've paid their toll, they need to go and compete in the market.

And if they're charging one or two dollars extra per barrel, then the purchaser is going to buy from somewhere else, from an American producer.

I think the other point is that the cost of production is extremely low in the Gulf.

And so the Gulf producers have got a lot of room to pay this kind of fee.

It's essentially a type of institutionalized piracy that you can use your geographic position on a choke point to extort money from people who need to get past and say, we're going to bomb you if you don't.

So, I mean, that was a feature of the global economy for centuries.

So this would set a precedent that sort of takes the world back.

And especially China, which is a key ally of Iran, the biggest exporter in the world, might not want to see this return to the past in terms of trade.

So the geopolitics would potentially speak against the deal.

The International Energy Agency issued new guidelines this week.

Advice on governments on how to limit energy consumption.

Citizens to use less power, so fly less, use public transport, work from home, reduce the speed limit on highways.

So really quite a broad range of measures to limit demand.

The International Energy Agency, or the IEA, in Paris issued new guidelines this week.

Advice on governments on how to limit energy consumption.