By Finghín Kelly
The US and Israel’s war on Iran is unleashing bloodshed, suffering, and chaos all over West Asia. Hundreds of thousands are being displaced, thousands of ordinary people in Iran have been killed, and millions of lives are being put in danger. It is a war waged by the US and the Zionist State with the aim of asserting their power in the region and their right to profit.
There is no regard for the impact that this conflict will have on the lives of millions of people in Iran, the wider region, or globally. Yet, while millions suffer and have their lives turned upside down, others are making handsome profits.
Destruction of oil refineries
The destruction of oil refineries in Iran and the region will leave US oil and gas companies relatively stronger. The US will be poised to become the largest LNG producer after this war. The profits will roll in for them.
As widely reported, the war has led to the effective closure of the Strait of Hormuz. This is a narrow stretch of water separating the Gulf from the Indian Ocean. There is just a 3.2km wide area that is navigable for oil tankers. Most oil exports from Saudi Arabia, Iraq, the UAE, Kuwait, and Qatar rely on ships passing through this Strait.
Over 20% of the world’s oil and 20% of all LNG gas comes through the Strait. Its blocking is having a huge impact on the global supply of oil. As things stand, there are reserves, and the International Energy Agency’s member states have released 400 million barrels of oil. However, if the war continues, or if it is blocked due to chaos in the region, there will be a massive crisis for global capitalism, which is still hugely dependent on hydrocarbons for energy, the production of plastics, and fertiliser.
Military intervention in the Strait of Hormuz
The prospect of military intervention to secure the use of the Strait is being talked about by those imperialist powers not currently involved directly in the conflict. French President Emmanuel Macron has already spoken about the need to secure this narrow searoute, and has redeployed a French aircraft carrier and warships to the area.
The last major spike in oil prices happened at the start of the Russian invasion of Ukraine. Not only did prices rise for working-class households worldwide, but profits also rose.
In fact, most of the price increases at that time were due to the capitalist class using the crisis to boost its profits. It is estimated that 50%-53% of prices were due to increased profit levels.
This crisis is showing the same signs. In Ireland, we immediately saw a spike in the price of home heating oil and at petrol stations. Irish home-heating oil profiteers jacked up prices by 27.3% in one week! This is the highest increase in the EU, where price rises were eight times less. This is despite the stocks of these companies having been bought prior to the latest spike in global prices. They were engaging in naked profiteering.
The Government is sitting on its hands and allowing this profiteering to go unchecked. They met with fuel profiteers and simply spouted their talking points afterwards to the media about ‘global commodity prices’. This is what happened during the last spike in prices. As we see with housing, the Government is putting the glorification of the market ahead of the well-being of the majority.
Who profits from this crisis?
It is likely that other sectors, such as the supermarkets and agri-food, will use this crisis to jack up their prices and profits as this crisis continues.
Already, for years now, there has been an acute cost-of-living crisis. One in eight people is officially ‘at risk of poverty’; and this figure has been steadily increasing each year. Incredibly, 320,000 are in arrears on their electricity bills – a spike of 20% in the last year, and 180,000 are now in arrears on their gas bills. Low-paid workers, pensioners, and those with disabilities are hit the hardest by the cost of living. They will be hit the hardest by another such crisis.
Protests and political pressure were brought to bear on the FF/FG government during the last inflationary crisis, which forced them to bring in measures such as energy credits and one-off measures in the budgets at the time. Rather than take on the profiteers, public funds were used to help people pay the massive hikes in prices and profits for utility companies and the food industry.
Now the Government is extremely unwilling to take any steps to intervene. Successive Ministers have ruled it out.
Pressure needs to be brought to bear on the Government. We need to step up a campaign on the cost of living. This next inflation crisis can’t be used to again shift wealth from working-class people to the capitalist gougers. Those profiteers need to be robustly challenged:
- We must firstly say: No to the imperialist war for power, oil and profit in Iran. US military out of Shannon Airport.
- Tax the rich and big business to fund emergency payments for all working-class people impacted by this crisis.
- Run the state-owned ESB on a cost-even basis and free up its profits to reduce electricity and gas bills – the company made over €700 million in profits in 2024. Take the other energy companies into public ownership and reduce prices to 2020 levels. These companies must be run democratically by workers and communities.
- The legislative tools already exist to immediately stop profiteering – use the emergency clause in the Consumer Protection Act 2007 to immediately fix maximum prices to affordable levels.
- For real price controls that will reduce goods and services to affordable levels. Reduce rents to affordable levels and ban evictions. Building public homes on public land.
- Trade unions must fight for wage rises to meet the needs of workers impacted by the cost-of-living crisis. For a minimum wage of €18 an hour. We need mass demonstrations on the streets and industrial action to pressure the Government to take action on this crisis.
- Open the books of price-gouging companies – show us where the profits are being squirrelled away. Take the major retail chains and agribusinesses into public ownership. Food production and retail should be geared towards our needs and those of our planet – not for profit.
