“We’re not planning right now for any rationing. But we are prepared for that possibility, and in such case we will provide information well in advance,” Prime Minister Ulf Kristersson said at a press conference.

He said the effects of the Iran war on the Swedish economy had worsened “from ‘limited impact’ to ‘significant impact'”.

The standoff in the Strait of Hormuz, the gateway for around a fifth of the world’s oil and gas, has led to soaring oil and gas prices and affected economies around the world.

Kristersson said that for Sweden, there was now a risk of higher inflation and a slowdown in growth.

“This is the worst crisis in a very, very long time, when it comes to energy,” Finance Minister Elisabeth Svantesson said at the press conference.

The government has already taken measures to dampen the economic effects of the conflict on households, including sharp cuts to taxes on petrol and diesel.

It did not present any new measures on Thursday, but Svantesson said that if the war drags on, “fuel rationing could be a possibility, but first we would issue a recommendation to conserve fuel” and prioritise public transport.

Sweden may also need to increase its own energy production, she said, citing solar, wind, hydro and nuclear power.

The government said it would present an updated economic prognosis on May 1.