The launch of attacks on Iran by the US and Israel, and subsequent outbreak of conflict across the Middle East, has led to immediate rises in oil and gas prices, with pump prices likely to be affected.
Brent crude prices increased by as much as 13% to $82 per barrel in the first days of trading after the military action commenced. The Chancellor is being urged to review her decision to increase fuel duty this year to prevent further inflationary pressure on petrol prices.
A fifth of the world’s oil supplies move through the Strait of Hormuz every day, between Iran, Dubai and the UAE.
Logistics UK chief executive, Ben Fletcher, said: “With this shipping corridor disrupted, the global price of oil is already climbing: this increased cost will soon be seen at the UK’s pumps.”
Rachel Reeves announced in the Autumn Budget that fuel duty would be frozen at its current rate until September 2026. It will then increase by 1p from September 1, 2026, 2p from December 1, 2026, and 2p from March 1, 2027.
Barney Goffer, UK product manager at fleet management software provider Teletrac Navman, said: “The fleet industry is already facing significant pressure from soaring operational costs and repair expenses with the often-hidden challenge of social inflation. We need to be calling for an extension to fuel duty relief rather than continuing with the current proposed staggered increase from September 2026.”
Some analysts have warned the price of oil could hit $100 a barrel in the event of a prolonged conflict which could have a knock-on effect on inflation and interest rates.
RAC head of policy, Simon Williams said: “While the conflict in the Middle East undoubtedly has the potential to push up pump prices in the UK, it’s not a certainty. “The oil price would have to rise significantly and stay that way for some time to have a dramatic effect.
“Forecourt prices were already on the rise due oil trading nearer to $70 a barrel in the last few weeks. Regardless of the current situation, petrol rose by a penny a litre in February and is likely to go up by another penny in the next week or so to an average of 134p a litre.”
Williams said: “If oil were to climb to and stay at the $80 a barrel mark, then drivers could expect to pay an average of 136p for petrol. At $90, we’d be looking at over 140p a litre and $100 would take us nearer to 150p, but it’s all too soon to know.”
