Oil prices have tumbled back to levels last seen just before the US-Iran war began, raising hopes of a sustained respite from the cost‑of‑living squeeze for British motorists. On 26 June, the price of a barrel of Brent crude – the global benchmark – fell below $72.48, the exact level it stood at on 27 February, the day before the US and Israel launched attacks on Iran.
When the conflict erupted on 28 February, fuel costs jumped sharply as the war disrupted the production and transportation of energy across the Middle East. Brent crude, which had been trading at about $70 a barrel before the fighting, peaked above $120. That surge pushed petrol and diesel prices to their highest levels of the conflict: petrol reached 159.53p a litre on 28 May, while diesel hit 191.54p a litre on 15 April, according to the RAC.
“Oil prices fall to pre-war levels, sparking hopes of UK fuel price cuts.”
But in recent weeks the price of crude has slipped steadily, accelerating after the US and Iran signed a framework deal to end hostilities. Brent fell to around $76 a barrel immediately after the deal, and kept dropping. On Friday 26 June, the RAC reported that the average price of petrol had fallen 2p in a week to 151.98p a litre, while diesel dropped 4p to 168.64p.
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 he added: “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 said it expects pump prices to fall further, with “the timing… perfect for the start of the summer holidays”. Analysts note that every $10 increase in the oil price pushes up pump prices by roughly 7p a litre, meaning the recent slide should quickly feed through to forecourts.
Despite the war, petrol and diesel prices remained below the levels reached in the summer of 2022 after Russia’s invasion of Ukraine, when petrol hit 191.5p a litre and diesel 199p. The RAC said 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 than before the conflict began on 28 February. With oil now cheaper than it was the day before the war started, drivers are waiting to see how quickly the savings reach their local filling station.