UK petrol prices hit highest level since Iran war began

UK petrol prices have climbed to their highest point since the onset of the Iran war, with the average cost now standing at 160 pence per litre, according to the RAC motoring group. This surge directly impacts drivers' finances, reflecting the ongoing volatility in global oil markets.

The price of fuel closely tracks the wholesale cost of oil. Initially, the conflict in the Middle East caused oil prices to spike due to disrupted supplies. Prices later decreased following a framework deal between the US and Iran in June, but have since risen again after the collapse of peace talks. Analysts note that a $10 increase per barrel in oil price typically raises pump prices by approximately 7 pence per litre.

Brent crude, the global benchmark for wholesale oil, has experienced significant price fluctuations. Before the conflict, it hovered around $70 a barrel, peaking above $120 during the fighting. After the framework deal, prices fell back to near $70, but have since climbed above $100 following the breakdown of peace talks, currently trading around $90.

While petrol has reached its highest price since the Iran war began, diesel prices, though rising, remain below their April peak. The RAC anticipates diesel prices could reach 185 pence per litre in the coming weeks unless oil prices decrease significantly. Despite current levels, both petrol and diesel prices are still lower than the peaks seen in the summer of 2022 after Russia's invasion of Ukraine. Fuel retailers have denied accusations of price gouging, and the official markets regulator has found no evidence of retailers altering pricing strategies to exploit the crisis.

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The price of diesel was likely to reach 185p a litre 'in the next few weeks, barring any major oil price reduction'.