The signing of a peace deal between Iran and the US on 18 June has raised hopes of lower prices at the pump, but petrol and diesel remain far more expensive than before the conflict began.
Prices have started to drift lower in recent weeks as the prospect of a deal grew. In the UK, petrol now averages 154.72p per litre and diesel 174.30p per litre, according to RAC Fuel Watch data. But before the war, petrol cost 132.05p and diesel 141.6p. In the US, the average gasoline price has fallen from above $4.50 last month to $3.97 per gallon, still up from $2.98 before the war started. Diesel in the US has risen from $3.76 to $5.09 per gallon.
“UK petrol and diesel prices remain far above pre-war levels despite recent falls after the Iran-US peace deal.”
Simon Williams, head of policy at the RAC, said the recent fall in global oil and wholesale petrol prices "if sustained will in time lead to much lower prices at the pumps." But he added: "The big question is how fast will this happen, and whether the fall in pump prices happens as swiftly as the rise drivers had to endure through March and April did."
The war caused shockwaves across the global economy from February, closing the key Strait of Hormuz shipping corridor and driving up energy bills and air fares. The deal aims to reopen the Strait, but negotiations on Iran's nuclear programme have been deferred for 60 days, raising questions about how long the agreement will last.
UK gas prices, which almost doubled at the start of the conflict, have also fallen. The benchmark price was below 80p a therm before the war, peaked at 157p by 19 March, and is now back down at 98p per therm. However, consultancy Cornwall Insight warned it would be "overly optimistic" to assume prices will quickly return to pre-conflict levels. The UK energy regulator Ofgem has already set its next price cap on household energy bills for July, which cannot be changed. The average household bill is set to rise by 13% - or £221 per year - from next month, affecting 33 million households in England, Wales and Scotland.