More than a million Irish households will see their annual energy bills climb by hundreds of euro as a result of the ongoing conflict in the Middle East, with Electric Ireland announcing price increases of up to 8 per cent. The hikes had been widely anticipated and came just hours before reports began to emerge from the United States that the Trump administration and the Iranian regime were inching towards a deal which could see a degree of stability restored across global energy markets.According to multiple sources, negotiators on both sides have now agreed on a framework for a 60-day ceasefire extension deal and a pathway to negotiations aimed at reaching a long-term deal to end the war. However, US president Donald Trump has yet to sign off on the proposals.The tentative agreement came after Iran targeted a US airbase in Kuwait following US strikes on what Washington called an Iranian drone operation and will see negotiations on Iran’s nuclear programme held during that period. The reports prompted oil prices to reverse course and trade lower on hopes of a potential reopening of the Strait of Hormuz, but any prospect of a deal will come too late for 1.1 million Irish consumers of Electric Ireland who will be hit with an 8 per cent increase in the cost of electricity from the State’s largest provider from July 1st.Electric Ireland also announced a 7.7 per cent hike in the cost of domestic gas, with the cumulative impact of both increases leaving many households worse off by more than €250 a year.Electric Ireland said it had a “comprehensive hedging strategy in place which has limited the impact of rising wholesale energy prices to date”. However, the provider’s executive director Pat Fenlon said the conflict in the Middle East “continues to drive volatility in wholesale energy costs which have increased significantly”.Fears that other companies may follow Electric Ireland in raising prices were downplayed by Daragh Cassidy of price comparison and switching website bonkers.ie. [ Data-centre energy demand adds hundreds of euro to home electricity bills, study claimsOpens in new window ]He said the latest news “was expected” and noted that last autumn “most of the major energy suppliers increased their electricity prices by between 10 per cent and 15 per cent due to sustained high wholesale electricity costs and higher network charges for maintaining the electricity grid”.Electric Ireland did not follow the same line and instead announced an electricity price freeze for the winter months, alongside a small cut in gas prices. Cassidy said the increase that will be imposed later in the summer “effectively brings its electricity prices back into line with the rest of the market”.He said the announcement “will understandably worry households” but it was “not necessarily the start of another widespread round of electricity price hikes across the market. Even after this increase, for example, Electric Ireland’s standard electricity rates will still be lower than most of the other suppliers in the market,” Cassidy said.The consumer outlook for domestic gas is more concerning, with wholesale gas prices climbing by between 40 and 50 per cent in recent weeks due to the conflict in the Middle East. Cassidy said this was “likely to put upward pressure on gas prices across the wider market”.