The price of oil has fallen back to where it stood the day before the US and Israel launched attacks on Iran on 28 February, offering motorists a long-sought reprieve at the pumps. Brent crude briefly dipped below $72.48 (£55) a barrel this week, the same level as on the eve of the conflict, after the US and Iran signed a framework agreement to end their war.
When the war began, fuel costs jumped as the conflict significantly disrupted the production and transportation of energy across the Middle East. The price of a barrel of Brent crude – the global benchmark – had peaked above $120, sending pump prices soaring. Petrol reached a war-time high of 159.53p a litre on 28 May, while diesel hit 191.54p on 15 April.
“Oil returns to pre-war level after US-Iran deal, petrol falls 2p to 151.98p but still £10 above February.”
But in recent weeks the trend has reversed. On Friday, 26 June, the average price of petrol had fallen 2p in a week to 151.98p, and diesel by 4p to 168.64p, according to the RAC. The motoring group’s head of policy, Simon Williams, said: “Fuel prices are falling steadily in reaction to the drop in the price of oil and wholesale petrol and diesel costs which is good news for drivers who’ve had a torrid time at the pumps this year.”
Williams argued that the reductions should be faster and greater, especially for diesel. “Drivers really ought to see average prices of below 150p for unleaded and below 160p for diesel in the next week or so,” he said.
Motoring group the AA said it expects pump prices to fall further, adding that “the timing is perfect for the start of the summer holidays”. Analysts calculate that every $10 (£7.53) increase in the oil price pushes up pump prices by roughly 7p a litre. With crude now back below $72.48, wholesale costs continue to ease.
Despite the drop, filling up remains significantly more expensive than before the war. The RAC says it now costs £83.59 to fill a 55-litre family car with petrol and £92.75 for diesel – still £10.50 and £14.40 more respectively than at the end of February. Even so, prices remain well below the record levels of summer 2022 after Russia’s invasion of Ukraine, when petrol hit 191.5p a litre.
With the framework deal in place and oil volatility easing, drivers are hoping the promised faster cuts arrive before the school holidays begin.