Motorists filling up this weekend are already seeing cheaper fuel after the US and Iran struck an agreement to end their war, with the price of oil slipping back to where it stood the day before the conflict erupted. Brent crude, the global benchmark, fell below $72.48 a barrel at one point — the level it traded at on 27 February, just before US and Israeli attacks on Iran began.
When the war started on 28 February, fuel costs jumped as the conflict disrupted energy production and transport across the Middle East. Oil rocketed from about $70 to above $120 a barrel, forcing petrol prices to a war-time peak of 159.53p a litre on 28 May, while diesel hit 191.54p on 15 April.
“Petrol and diesel prices fall after US-Iran deal sends oil back to pre-war levels, but remain above February costs.”
But the framework deal signed by Washington and Tehran has sent wholesale costs tumbling. The average price of petrol has fallen 2p in a week to 151.98p, and diesel has dropped 4p to 168.64p, according to the RAC’s data on Friday. That still leaves a family filling a 55-litre car paying £83.59 for petrol and £92.75 for diesel — £10.50 and £14.40 more than before the war.
Simon Williams, the RAC’s head of policy, 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. 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.”
The AA has also predicted further falls, saying “the timing is perfect for the start of the summer holidays”. Even after the drop, current prices remain well below the record levels of summer 2022, when petrol hit 191.5p and diesel 199p following Russia’s invasion of Ukraine.