British motorists are facing the prospect of the most expensive petrol ever recorded at UK forecourts as the conflict in Iran drives oil prices above $100 a barrel and analysts warn of further sharp rises ahead.
Brent crude climbed past $104 a barrel by Sunday evening, reaching levels not seen since autumn 2023, with Goldman Sachs warning prices could hit around $150 per barrel if the crisis has not eased by April. In more extreme scenarios, some oil traders have cautioned that crude could surge as high as $250 per barrel. The all-time high for petrol at UK pumps stands at 191.5p per litre, a figure now under serious threat.
The impact is already being felt on forecourts. Diesel jumped 8.6p in just seven days to hit a 16-month high of 150.97p per litre, while petrol averaged 137.51p after climbing 4.7p in a single day. Howard Cox of FairFuelUK warned that if oil surpasses $100, it could add between 10p and 20p per litre to both petrol and diesel “within weeks.” He added: “If it reaches $120, I believe it will trigger a recession.” Should prices reach those levels, the cost of filling a family car with petrol could exceed £100 for the first time since Russia’s invasion of Ukraine.
The surge is being driven by a combination of direct attacks on energy infrastructure and the near-paralysis of the Strait of Hormuz — the waterway through which approximately a fifth of the world’s oil and liquefied natural gas passes. Iran has threatened to “set ablaze” any tanker attempting to use the strait, and just one vessel crossed the passage this weekend compared with dozens on a typical day. US Energy Secretary Chris Wright said disruption to shipping through the strait was likely to persist for weeks.
The situation was further inflamed after US and Israeli warplanes struck oil facilities across Iran, with thick black smoke reported above Tehran and residents warned about the risk of acid rain from toxic fumes. Iran’s Sharan storage facility — one of its largest — was among those targeted. Tehran responded by continuing strikes against Gulf oil-producing states. Kuwait began cutting oil output on Saturday and declared force majeure on shipments, a fire broke out in the UAE’s Fujairah oil industry zone, and Saudi Arabia’s Defence Ministry said it intercepted a drone heading toward its Shaybah oil field.
President Donald Trump dismissed the oil price surge as a worthwhile cost, posting on Truth Social as crude broke through $100 for the first time in four years: “Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay.” White House press secretary Karoline Leavitt described the situation as “a short-term disruption for the long-term gain” of removing the Iranian regime. French President Emmanuel Macron became the first Western leader to directly call on Iran’s president to reopen the Strait of Hormuz.
British drivers also face additional costs entirely separate from the global oil market. Labour’s planned fuel duty rises include a 1p increase in September, a further 2p in December and another 2p next March. Shadow Chancellor Sir Mel Stride called on Rachel Reeves to reverse course, saying: “The latest developments in the Middle East make it even more important for Rachel Reeves to scrap the rise in fuel duty.”
UK gas storage currently holds fewer than two days’ supply, though National Gas has said this is within normal parameters for the time of year.
