First Minister warns Middle East conflict could push up energy costs for Welsh households
First Minister Eluned Morgan has warned that the ongoing conflict in the Middle East could drive up energy costs for households across Wales, with knock-on effects for inflation, interest rates and the wider economy.
In a Written Statement issued on Tuesday, the First Minister said a further rise in energy costs “would impact household budgets through higher petrol and domestic heating prices, with potential knock-on effects for consumer confidence and the wider retail economy.”
She warned this “could drive inflation higher, keeping interest rates elevated for longer and prolonging existing cost-of-living pressures.”
The statement confirmed the Welsh Government is monitoring disruption to air travel in the region and potential indirect impacts on Wales through global energy markets, trade and supply chains.
It follows Israel and the US launching attacks on Iran on 28 February, with Iran retaliating with attacks across the region including the UAE, Qatar, Kuwait, Bahrain, Saudi Arabia, Oman, Jordan and Lebanon.
The Welsh Government’s Middle East and North Africa team is based across two offices in Dubai and Doha, both inside British Embassies.
The UK Government is preparing plans to evacuate at least 200,000 British nationals from the region if commercial flights are not available.
The First Minister confirmed she was briefed directly by senior UK Cabinet Office officials over the weekend and received a follow-up briefing on Monday.
Welsh Government crisis management arrangements have not been activated, but the statement said the government “will keep our position under review.”
The UK terrorism threat level, assessed by the Joint Terrorism Analysis Centre, remains at SUBSTANTIAL, meaning an attack is considered likely.
The statement confirmed Wales is maintaining “heightened cyber vigilance across Welsh public services” in line with guidance from the National Cyber Security Centre, and advised businesses to do the same.
On community cohesion, the First Minister said: “There is no place in Wales for hate or intimidation.”
The Welsh Government has reached out to community partners and said it is working with local authorities, police and community and faith groups “to ensure people feel safe.”
Speaking on BBC Wales’ Sunday Supplement on 1 March, the First Minister said: “Instability in the Middle East will have an impact here in Wales.”
She added: “There will certainly be an economic impact if you think about the Strait of Hormuz and the fact that there may be a blockage in terms of trade and the price of oil.”
Reports of disruption to Liquid Natural Gas supply at Milford Haven port are also emerging.
Wales has significant trade ties with the Gulf region.
The UAE is Wales’ 12th largest export partner by value, Qatar is 13th and Saudi Arabia 16th.
These states, along with Kuwait, Oman and Bahrain, form the Gulf Cooperation Council, which is currently in trade negotiations with the UK.
Cabinet Secretary for Economy, Energy and Planning Rebecca Evans MS is due to attend the next meeting of UK Ministers on trade with the US and the GCC on 4 March.
She will also appear before the Economy, Trade and Rural Affairs Committee for trade scrutiny on 5 March alongside Deputy First Minister Huw Irranca-Davies MS.
The US is Wales’ largest trading partner by far, with total goods trade worth £5.9 billion in the year ending September 2025.
Wales does not trade directly with Iran, which is subject to more than 600 UK sanctions.
The Foreign, Commonwealth and Development Office has set up a webpage with the latest travel advice and is encouraging those affected to register for direct updates.
The UK Government published a summary of its legal position on 2 March, stating it is “acting in the collective self-defence of regional allies who have requested support.”
The Welsh Government joined international partners in calling for “restraint, a return to diplomacy and full adherence to international law.”
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