UK drivers are being warned to expect record petrol prices following recent US strikes on Iran, which have intensified tensions in the Middle East. The escalating conflict has already led to reports of suspended oil shipments through the strategic Strait of Hormuz, a critical chokepoint for global energy supplies.
The Strait of Hormuz, situated between Oman and Iran, is a vital passage through which about 20% of the world’s oil supply is transported. Edmund King, president of the AA, told The Times, “The turmoil and bombing in the Middle East will disrupt global oil distribution, inevitably causing price hikes at the pump.”
William Jackson from Capital Economics noted to The Telegraph that even if the military strikes remain limited, Brent crude oil prices may climb to around $80 (£59.47) per barrel. The situation is further complicated by Israeli military strikes in Lebanon, which have resulted in casualties and increased regional instability.
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The Israeli military announced operations targeting Hezbollah positions following missile and drone attacks launched by the militant group in retaliation for the killing of Ayatollah Ali Khamenei, Iran’s supreme leader.
Jackson added, “If the conflict drags on and directly impacts oil supply, Brent prices could surge to $100 (£74) per barrel, potentially pushing global inflation rates up by 0.6 to 0.7 points. Natural gas prices are also expected to rise.”
Danni Hewson, head of financial analysis at AJ Bell, highlighted that oil prices are projected to jump significantly in the coming days. Brent crude surged as much as 13% in early trading, reaching $82 a barrel—a 14-month high—triggered by fears over the near closure of the Strait of Hormuz.
Hewson cautioned, “Prolonged high oil prices risk reigniting inflation pressures, recalling the widespread economic strain experienced during the peak of the cost of living crisis.”
Energy consultancy Wood Mackenzie noted, “This disruption creates a dual supply shock: current exports through the Strait are halted, while OPEC+ reserves and most of OPEC’s spare capacity remain inaccessible as the waterway is effectively closed, worsening the global oil market balance.”
UK consumers may, therefore, face escalating fuel costs in the coming weeks as instability in the Middle East continues to ripple through global energy markets.