UK petrol and diesel prices have climbed to their highest level since mid-June, according to data from motoring organisation RAC, as the US-Israel war with Iran continues to squeeze drivers’ finances. The price of oil has returned to around $100 a barrel after peace talks collapsed, undoing the brief relief that followed a framework deal in June.
When the conflict began on 28 February, oil prices surged as fighting disrupted production and transportation across the Middle East. Brent crude, the global benchmark, leapt from about $70 a barrel before the war to above $120. Then, in early July, a framework agreement between the US and Iran sent prices tumbling back to near $70. But with tensions resurfacing, wholesale oil has climbed above $100 (£75) a barrel again.
“UK fuel prices hit highest since mid-June as oil returns to $100/barrel amid Iran war tensions.”
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.” Analysts note that every $10 (£7.53) rise in the oil price adds roughly 7p a litre at the pump.
According to the RAC, the average price of petrol hit an Iran war peak of 159.53p a litre on 28 May, while diesel peaked at 191.54p on 15 April. After the July deal, prices sank to a low of 150.59p for petrol and 164.52p for diesel. Now, they have rebounded: petrol costs 156.19p a litre and diesel 173.15p.
Despite the rises, both fuels remain below the summer 2022 highs following Russia’s invasion of Ukraine, when petrol reached 191.5p and diesel 199p. Price movements in wholesale markets take about a fortnight to show at the pump, so the full impact may still be coming.
Fuel retailers have denied accusations of price gouging during the conflict. 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 allows drivers to compare prices across UK petrol stations. Luke Bosdet, head of policy at the AA, expressed surprise at how quickly prices had fallen earlier this year, attributing it to that scheme.
On 20 May, then Prime Minister Sir Keir Starmer said a planned 5p increase in fuel duty due in September would be postponed — a move that now leaves motorists watching the oil markets with unease.