Oil prices rose by as much as 13% after US and Israel launched strikes on Iran, threatening to impact UK households through higher fuel costs
UK motorists are hunting for the best petrol deals as oil prices surge following escalating tensions in the Middle East. Prices rocketed by as much as 13% on Monday after the US and Israel launched strikes on Iran.
The conflict threatens to hit millions of British families through higher fuel costs, rising inflation and potential interest rate changes.
Shipping through the vital Strait of Hormuz ground to a near-halt following Iranian retaliation to the initial bombardment by Israel and the United States, sending oil prices soaring.
On Monday, the price of Brent crude oil soared by as much as 13%, rising above 82 US dollars a barrel, before paring back. Pump prices at UK forecourts were already increasing slightly in recent days to more accurately reflect wholesale prices.
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The spike came as counter-strikes damaged tankers and severely disrupted shipments through the Strait, a waterway between Iran and Oman linking the Gulf to the Arabian Sea, which handles roughly 20% of global oil and gas supplies.
More than 200 vessels, including oil and liquefied gas tankers, were anchored outside the Strait, shipping data revealed on Sunday.
Three tankers sustained damage and one seafarer lost their life in Sunday’s attacks in Gulf waters. Whilst most shipments head to China and India rather than Europe, the disruption has rattled markets worldwide.
The AA said fuel prices will “inevitably increase” while the RAC said the conflict has the “potential to push up pump prices” but “it’s not a certainty”.
AA president Edmund King said much of the increase in oil prices since the start of the war was “being factored in by market traders” in advance.
He predicted that petrol prices could return to levels last seen at the start of 2026, when a litre of petrol was an average of 135.7p, compared with as low as 131.9p last month.
Mr King said: “Obviously, some global oil distribution disruption will continue depending on the length of the conflict and issues in the Strait of Hormuz. Pump prices in the coming weeks will inevitably increase, possibly in the short term back up to where they were at the start of the year.”
He went on: “There is no need for drivers to break their refuelling routine. It takes time for cost increases to work their way through to the pump. Most car commuters will already have filled up for the start of the working week. They now have 300 miles or more in their tank – plenty of time to gauge what is happening at the pumps and then go looking for the cheaper fuel.”
According to Petrol Map, the average petrol price in Liverpool is 133.5p/litre, reports the Liverpool Echo. In London, the average petrol price is 148.2p/litre while drivers in Birmingham are paying on average 141.6p/litre.
Jorge Leon, senior vice president and head of geopolitical analysis at energy intelligence company Rystad Energy, warned that should the Strait of Hormuz become blocked, the resulting surge in oil prices would directly affect British consumers.
Approximately 15 million barrels of crude oil navigate through the Strait of Hormuz daily, representing roughly a third of worldwide crude trading, Mr Leon explained.
Qatar, situated on the Persian Gulf, ranks amongst the planet’s largest exporters of liquified natural gas, and shutting the strait would likewise affect these shipments, he noted. Turbulence in the liquefied natural gas markets could push gas prices upwards, which Mr Leon noted were intrinsically connected to electricity costs.
He explained: “A higher electricity price will feed through the global economy, and, in particular in the UK, (lead to) higher inflation. We have a direct effect – which is higher prices at the pump and higher electricity bills, but also a secondary effect, which is things will get more expensive because inflation might increase.”
Mr Leon emphasised that such a scenario would only unfold if tensions in the region failed to ease and the disruption proved prolonged.
