UK petrol prices have risen to their highest level since mid-June, according to data from motoring organisation RAC, as the US-Israel war with Iran continues to disrupt global energy markets. The price of oil has returned to around $100 a barrel after a brief lull, and analysts warn that unless the fighting ends soon, drivers could face a new Iran war high at the pump.
The conflict erupted on 28 February, sending crude prices soaring as fighting severely disrupted the production and transportation of energy across the Middle East. Brent crude – the global benchmark – rocketed from about $70 a barrel before the war to a peak above $120. In June, a glimmer of hope emerged when the US and Iran agreed a framework deal to end hostilities, prompting oil prices to nosedive back to near $70. But that relief proved short-lived: prices have now climbed back above $100 a barrel as tensions resurface.
“UK petrol prices hit highest since mid-June as oil climbs above $100 a barrel amid US-Israel war with Iran”
Simon Williams, head of policy at the RAC, said: “Unless the hostilities end soon, it’s hard not to see the price of petrol reaching a new Iran war high.” The cost of crude is a key ingredient in petrol and diesel, and every $10 increase in the oil price pushes up pump prices by roughly 7p a litre, analysts say.
According to the RAC, the average price of petrol hit an Iran war peak of 159.53p a litre on 28 May, while diesel’s highest was 191.54p on 15 April. By early July, following the framework deal, prices had fallen to 150.59p for petrol and 164.52p for diesel. But since then they have been rising again: the latest data shows petrol now costs 156.19p a litre and diesel 173.15p. Despite the war, prices remain below the summer of 2022 levels after Russia’s invasion of Ukraine, when petrol reached 191.5p and diesel 199p.
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 lets drivers compare costs across petrol stations. Luke Bosdet, head of policy at the AA, said the group had been surprised at the speed that prices fell after the framework deal, attributing it to the scheme.
On 20 May, then Prime Minister Sir Keir Starmer said a planned 5p increase in fuel duty due in September would be postponed. But with tensions resurfacing and oil above $100, the respite may be brief. Because transporting oil is a slow process, price movements in wholesale markets take about a fortnight to show at the pump – meaning the recent rise may yet accelerate.