For UK motorists, the end of the Iran war could mean a welcome drop at the pumps. The price of a barrel of Brent crude has fallen from above $120 to around $83 following the US and Iran agreement to end their conflict, raising hopes that petrol and diesel prices will tumble further.
When the war began on 28 February, fuel costs jumped as the conflict disrupted the production and transportation of energy across the Middle East. Brent crude, the global benchmark, had been about $70 a barrel before the war, but peaked at over $120 during the conflict. Now, with the framework deal reached, oil prices have slipped and the RAC motoring group says that “should quickly bring prices down at the pumps”.
“UK petrol forecast to drop to 148p a litre after US-Iran deal, says RAC.”
According to the RAC, the price of petrol reached an Iran war peak of 159.53p a litre on 28 May, while diesel’s highest price during the conflict was 191.54p a litre on 15 April. In the last week, petrol has come down nearly 2p to 156.37p a litre, with diesel reducing by 3p to 177.89p a litre. However, filling up is still far more expensive than before the war: it now costs £97.22 to fill a 55-litre family car with diesel – £18.91 more than on 28 February – and £85.74 for a tank of petrol – £12.68 more than at the start of the conflict.
Simon Williams, head of policy at the RAC, said: “The oil price has already dropped as a result of the US Iran deal to open the Strait of Hormuz which is good news for drivers as this should quickly bring prices down at the pumps.” He predicted that if oil consistently trades around $85, “we should see the price of petrol reduce to 148p a litre from its current average of 156p in the next couple of weeks. Diesel, which currently costs an average of 177p, ought to fall to under 160p.”
Despite the conflict, petrol and diesel prices have remained below the levels reached in the summer of 2022 following Russia’s invasion of Ukraine, when petrol hit 191.5p a litre and diesel reached 199p. Because transporting oil is a slow process, price movements in wholesale markets take about a fortnight to show at the pump. Fuel retailers have denied accusations of price gouging during the conflict, and the official markets regulator said it had “not seen evidence of retailers actively changing their pricing strategies to take advantage of the crisis”. A government scheme called Fuel Finder now lets drivers compare fuel costs across UK petrol stations.