Motorists across the UK are finally seeing relief at the pumps after the US and Iran struck a framework agreement to end their war, sending oil prices back to levels not seen since before the conflict erupted on 28 February. But despite the sharp drop, filling up a family car still costs more than £10 more than it did before the war began.
When the US and Israel launched attacks on Iran in late February, the price of Brent crude – the global benchmark for wholesale oil – soared from about $70 a barrel to a peak of above $120, as the war disrupted production and transportation across the Middle East. The cost of petrol followed, hitting a conflict high of 159.53p a litre on 28 May, while diesel peaked at 191.54p on 15 April.
“UK fuel prices fall as oil returns to pre-war levels after US-Iran deal, but drivers still pay £10.50 more than before February.”
Since the peace deal was signed, the price of oil has tumbled. It briefly fell below $72.48 a barrel – the exact level it sat at the day before the war began – and has continued to slide. According to the RAC, the average price of petrol had fallen 2p in a week to 151.98p by Friday 26 June, while diesel dropped 4p to 168.64p.
"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," said Simon Williams, the RAC's head of policy. "But our analysis of wholesale data shows the reduction should be faster and greater, particularly 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."
Motoring group the AA echoed that optimism, saying it expects pump prices to fall further and that "the timing is perfect for the start of the summer holidays".
Yet the pain is far from over. 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, before the war sent prices surging. Analysts note that every $10 increase in the oil price pushes up pump prices by roughly 7p a litre, but the reverse takes time.
Despite the conflict, petrol and diesel prices remained below the record levels reached in the summer of 2022 following Russia's invasion of Ukraine, when petrol hit 191.5p a litre and diesel reached 199p. For now, drivers are hoping the post-war slide continues – and that the reductions at the tills finally catch up with the falls in wholesale markets.