Petrol Prices in UK Hit Record High Amid Continuing Iran Conflict
The average cost of petrol in the UK has climbed to over 163p per litre, marking the highest point since the onset of the Iran war. This information, reported by the RAC, highlights the financial pressure on drivers as prices continue to escalate.
The conflict, which erupted on 28 February, has severely impacted oil supplies in the Middle East, leading to a surge in the price of Brent crude oil — a key global benchmark. Initially, oil prices spiked above $120 per barrel before a framework deal in June momentarily eased the situation, lowering costs to approximately $70 per barrel. However, with peace negotiations collapsing, prices have since risen and are currently around $94 per barrel.
Impact of Wholesale Oil Prices on Pump Costs
The cost of wholesale crude oil directly impacts petrol and diesel prices, as crude is a fundamental component of these fuels. Analysts note that a $10 rise per barrel typically increases the price at the pump by about 7p per litre. Though international oil prices fluctuate with geopolitical tensions, the effects on consumer prices can be delayed due to the time it takes for oil to be transported.
With the average price of diesel sitting at 184.99p per litre, it remains lower than its peak (191.54p) on 15 April. Meanwhile, the RAC cautions that sustained high oil prices will likely lead to higher costs for drivers at the fuel pump in the coming weeks.
Constraints in the Middle East Shipping Routes
The ongoing conflict has disrupted the Strait of Hormuz, through which about 20% of the world’s oil and liquefied natural gas ordinarily pass. As a result, global supplies have been restricted, continuing to drive oil prices higher and affecting the global economy.
The expectation is that even if the strait is reopened, normal shipping volumes will not resume immediately, suggesting prolonged price impacts.
The UK’s Oil and Gas Sources
The UK relies heavily on oil and gas imports, chiefly from the US and Norway, with the price dictated by the global oil market. While there is some domestic extraction from the North Sea, much of this is processed abroad.
In response to rising costs, the government has deferred a 5p increase in fuel duty, initially set for September, to allow consumers some respite until the end of December.
Reporting based on coverage first published by bbc.co.uk.