How have UK petrol prices been affected by US-Iran war and rising cost of oil?

As conflict in the Middle East continues to impact economies around the world, motorists in the UK are grappling with rising petrol and diesel prices at the pump.

Gasoline and diesel prices rose by between 6.12 pence and 12.74 pence per liter since Saturday, February 28, when the US launched an attack on Iran, reaching the highest level in more than 20 months this week.

This marks the sharpest increase in pump prices since Russia invaded Ukraine in 2022.

Motorists can now expect 138.96p per liter of unleaded petrol and 155.12p per liter of diesel at the pump, RAC data shows.

This means the cost of fueling a 55-litre family diesel car has risen by £6.67 in just over a week, with further price increases expected in the coming days.

The increase was due to the increase in oil prices, which had a significant impact on the wholesale fuel cost. Brent crude, the global benchmark for oil prices, rose above $100 a barrel for the first time since 2022 on Monday.

The rate was already at a seven-month high before Saturday’s attack, but had remained at $73 a barrel before the start of the conflict. It was at around $98 on Wednesday.

Conflicts spread across the Middle East after the US and Israel attacked Iran in February, followed by retaliatory Iranian attacks on targets in the United Arab Emirates (UAE), Qatar, Bahrain, Jordan and Iraq.

As America and Israel continue airstrikes on Iranian targets, explosions continue to be reported across the region. As the conflict escalated, Iran warned that it would “set fire” to any ships attempting to pass through the Strait of Hormuz.

The strait provides the only passage from the Persian Gulf to the open ocean, making it a crucial point for the oil industry. Approximately 20 percent of the world’s gas and oil is transported by water, and the Iranian threat is causing great damage to global trade.

In light of the situation, AA chief Edmund King has urged motorists in the UK to consider cutting back on “non-essential journeys” as fuel prices rise.

He said: “The longer this conflict continues, the more impact it will have on the cost of oil.

“The fact that Brent Crude oil exceeds $100 per barrel causes concern in the markets for the transportation sector and drivers.

“There will be gradual increases in pump prices, but this should not happen overnight as fuel is purchased at previous prices.

“Our recommendation is that drivers should not change their fueling habits, but may consider cutting out some non-essential trips and changing their driving style to save fuel.”

Analysis of the historical link between oil and fuel prices by the Energy and Climate Intelligence Unit think tank shows that oil trading at $100 per barrel typically results in oil prices of around 150 pence per litre, while oil reaching $120 per barrel means oil prices of around 170 pence per litre.

RAC head of policy Simon Williams added: “Average petrol and diesel prices have risen sharply in the last week and are unfortunately likely to continue rising, so the outlook for UK motorists looks increasingly bleak.

“Unleaded fuel is almost certain to reach an average of 140p per liter within the next week, while diesel looks very likely to rise to at least 160p per litre.

“We encourage drivers to continue to fuel up as normal but shop around to find the best prices.”

Rachel Reeves said forecourt operators “will not tolerate price gouging” after it was noted that some were charging as much as 180p per liter for petrol. The Chancellor said he would meet with oil retailers to discuss rising prices.

But some experts have also called on the Chancellor to cancel Labour’s planned fuel tax increase, which would reverse the 5p per liter cut imposed in March 2022 in response to Russia’s invasion of Ukraine.

Ms Reeves announced a reversal of this policy in the November Budget; This year it started with a 1p increase in September, followed by a 2p increase in December and finally a 2p increase in March 2027.

He has so far rejected calls to scrap the plan but said the policy was “under review”.