Petrol and diesel drivers could see prices 'surging' at pumps this week following the end of the ceasefire in Iran, experts have warned. The outbreak of the conflict earlier this year sent prices at the pumps spiralling, with drivers forced to pay more than 180p per litre for diesel and 160p for petrol at the peak of the crisis as the cost of oil jumped.
Oil Prices Jump Again After Weekend Attacks
Despite a cooling off in the past month after the vital trade route along the Strait of Hormuz was reopened, oil prices have shot up again over the weekend. Benchmark Brent crude rose 4% to 79 US dollars a barrel amid confusion over the Strait of Hormuz, with America and Iran both claiming control. European and UK gas prices have also surged back up to levels seen a month ago.
The strait – through which a fifth of the world's oil and gas is normally carried – continues to be a key issue in fraught peace-deal negotiations between the US and Iran. Oil prices had returned to pre-war levels in June after an interim peace deal was signed by the US and Iran, with the countries declaring the Strait of Hormuz to be reopened. But Iranian strikes on ships passing through the Strait have prompted retaliatory attacks by the US and there are fears the war could fully resume.
Impact on Motorists Ahead of Summer Holidays
It is set to send prices at the petrol pumps surging higher once more, coming just ahead of the school summer holidays and putting pressure on motorists as the summer getaway season gets into full swing. Susannah Streeter, chief investment strategist at the Wealth Club, said: “The war has underlined the huge importance of the waterway, which is so vital for shipments from the region. The Strait has become the United States’ Achilles’ heel in this conflict and Iran’s strongest bargaining chip. It’s a strategic chokepoint that gives Tehran disproportionate leverage despite America’s overwhelming military superiority.”
She added: “While prices are still not at crisis levels, the creep upwards will ignite fresh inflationary worries and concerns about how far higher interest rates could move.” The RAC says petrol prices are currently 150.8p per litre and diesel is 164.6p per litre on average.
