UK Petrol Prices: Israel-Iran Conflict & Oil Costs
The Israel-Iran conflict is dramatically reshaping the UK petrol market.You’ll find that escalating tensions have already sparked a surge in oil prices, directly impacting the cost of petrol and diesel for consumers across the UK. Market analysts are closely monitoring the situation, warning of potential economic headwinds, as the volatile situation threatens global oil supplies. News Directory 3 keeps a close watch on these developments, keeping you informed. Experts predict further price hikes in the coming months. What measures will the UK government take? Discover what’s next in the ongoing saga of global energy markets.
Iran-Israel Conflict Drives Up Oil prices, Threatening UK Petrol Costs
Updated June 16, 2025
The ongoing conflict between Israel and Iran has triggered a rise in oil prices, leading to concerns about increased petrol prices for Britons. Traders are worried that the conflict could escalate, disrupting global oil supplies. Iran, a major oil producer, accounts for approximately 3% of the world’s supply.
Brent crude initially rose by 0.5% to nearly $75 a barrel before falling, while U.S. crude also saw an initial increase. Last Friday, crude prices jumped by over 13% following Israeli strikes on Iranian targets, including nuclear facilities, and retaliatory missile strikes from Iran.
Thomas Pugh, an economist at RSM UK, stated that the israel-Iran escalation introduces a new source of geopolitical tension, possibly impacting UK businesses through higher oil and natural gas prices. He anticipates a roughly 5p increase in petrol and diesel prices over the next few months due to the rise in oil prices.
According to the AA, average UK petrol prices remained steady at 132p a litre, and diesel at 138.2p a litre, on Friday. Wholesale petrol costs are up from April and May, but still lower than the first quarter of the year. U.S. gasoline demand during the summer also influences UK pump prices, the AA noted.
Jochen Stanzl, chief market analyst at CMC Markets, suggested the market anticipates a limited conflict, though hostilities are expected to continue.Mohamed El-Erian, an economic adviser to Allianz, warned the conflict could lead to slower global growth and increased inflation.
Shore Capital analyst James Hosie indicated the spike in Brent crude could be temporary if the impact on Iran’s oil facilities remains limited. Airstrikes targeted Iranian energy assets, raising concerns about potential disruptions to Iran’s oil exports.
Concerns exist that Iran might target regional energy supplies by disrupting tanker movements in the Strait of Hormuz, a critical waterway for global oil and liquefied natural gas flow. Hosie noted that Saudi Arabia and other oil producers could increase production to offset any disruptions to Iranian exports.
Before the conflict, oil prices were below the previous year’s average. Rachel Reeves stated the UK government would take action to protect people from the economic consequences. She told the BBC that rising energy costs would be addressed, but the UK is “not anywhere near that stage at the moment”.
What’s next
The situation remains volatile, and the potential for further escalation could significantly impact global energy markets and, consequently, UK petrol prices. Monitoring of the conflict’s progression and any potential disruptions to oil supplies will be crucial in the coming weeks.