Energy bills could soar by over £500 amid threats to blow up tankers in vital Middle Eastern shipping channel

Household energy bills could rise by more than £500 in the summer if the Middle East crisis continues, a think tank has warned.

Gas prices have risen to a three-year high and oil has also been on the rise since the Iranian military threatened to blow up any ship trying to pass through the Strait of Hormuz.

Amid its escalating conflict with the US and Israel, Iran continues to hold the world hostage by ‘closing’ the world’s busiest oil shipping channel, through which the Persian Gulf flows into the Arabian Sea.

Last night, Donald Trump said the US Navy would begin escorting tankers across the strait ‘if necessary’.

In an online post he said: ‘No matter what happens, the United States of America will ensure the FREE FLOW OF ENERGY TO THE WORLD. ‘THE ECONOMIC AND MILITARY POWER OF THE UNITED STATES IS THE GREATEST POWER IN THE WORLD – More action to come.’

But if conflict continues for a long time, household energy bills could rise by more than £500 this summer, according to the Resolution Foundation.

“If overnight rises in oil and gas prices continue, we could see inflation returning to 3 per cent by the summer and typical energy bills being £500 higher,” the company’s chief executive, Ruth Curtice, warned.

‘Events in the Middle East have made support for families struggling with the high cost of living more urgent.’

Picture: Long petrol queues form at Costco in Liverpool as fears about oil prices grow after attack on Iran

It is feared that the conflict could have a similar impact to Russia’s invasion of Ukraine in February 2022.

Yesterday, the USA warned of ‘impending’ missile and drone attacks on the Saudi Arabian city of Dhahran, where the country’s oil company Aramco is headquartered. A warning was sent: ‘Do not come to the US consulate’. ‘Immediately take shelter on the lowest floor of your home and away from windows. ‘Don’t go out.’

In Britain, motorists have been urged not to panic and buy petrol due to concerns that the conflict will increase costs.

As Iran continues to target Gulf countries such as the UAE, Qatar and Bahrain, maritime activities in the Strait of Hormuz have come to a near halt and markets have tumbled.

Ship tracking data showed clusters of large tankers capable of carrying millions of barrels of oil anchored in major ports on both sides of the strait.

Iran declared the canal, which is only 24 miles wide at its narrowest point, ‘closed’ and warned that any ship trying to pass through it would be opened fire on.

“If anyone tries to pass, the heroes of the Revolutionary Guard and the regular navy will set these ships on fire,” a senior official said.

Oil prices subsequently rose, with global benchmark Brent crude rising more than 13 per cent to just over $85 (£64) per barrel; this is the highest level recorded since July 2024. Analysts said a prolonged conflict could reach $100 (£75).

It is estimated that a sustained rise in Brent to $100 could add as much as 20p per liter to petrol and diesel in a matter of weeks.

Gas prices in the UK rose by 46 percent yesterday to over 165 pence, following the sharp rise seen on Monday, and fell to 146 pence in the afternoon.

The increase in gas prices comes after QatarEnergy, one of the world’s largest exporters, halted production following ‘military attacks’ on its facilities in Ras Laffan and Mesaieed.

The Financial Times reported that Iraq’s crude oil production is close to collapse as its largest fields are closed due to a lack of shipping vessels and storage capacity.

Petrol stations across the UK appeared to be running out of fuel as Brits scrambled to fill up their vehicles before prices at the pump rose. The Valero Garage in Beckenham, south London, ran out of petrol on Monday evening after dozens of locals rushed to fill up their tanks. A worker said some came with gasoline cans.

Signs reading ‘We apologize for being unavailable’ were also seen at the nearby BP fuel station in Croydon.

However, the Fuel Retailers Association called on drivers to remain calm. “Enforce restrictions and buy as normal to make sure we have enough supplies to make the transition,” the company’s chief executive, Gordon Balmer, told Sky News yesterday. ‘Rising fuel prices harm the economy in the form of higher inflation, affecting household budgets that are already under pressure.’

RAC said there should not be a ‘shock increase in pump prices’ as it takes time for the increased costs to be reflected in oil prices.

It comes as Chancellor Rachel Reeves was accused of ignoring support for motorists in her Spring Statement. ‘This was a missed opportunity for economic growth for the Chancellor in the midst of a damaging new oil crisis,’ said Howard Cox, founder of FairFuelUK.

‘Oil prices will continue to rise uninterruptedly by targeting refineries, oil tankers and the Strait of Hormuz. For over two decades, our clueless politicians have not planned for self-sufficiency in oil and gas production.

‘FairFuelUK continues to call on Rachel Reeves to cut fuel duty but freeze it at least for the life of parliament.’