How will UK petrol prices be affected by US-Iran war and rising cost of oil?
Drivers in the UK could face record-breaking petrol prices as soon as this month as the conflict between US and Iran disrupts oil markets across the globe.
Conflict has spread across the Middle East after the US and Israel carried out strikes on Iran on Saturday, which were followed by retaliatory Iranian strikes on targets in the United Arab Emirates (UAE), Qatar, Bahrain, Jordan and Iraq.
Blasts continue to be reported across the region, as America and Israel maintain airstrikes on Iranian targets. The country’s supreme leader Ali Khamenei was killed in a targeted attack on Saturday, and top officials have vowed not to negotiate with the United States.
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As fighting escalates, Iran has warned that it will “set fire” to any ships trying to pass through the Strait of Hormuz, a crucial shipping channel for the global oil industry.
At least three ships were reported to have been attacked near the strait over the weekend, sending the markets into turmoil.
The strait provides the only passage from the Persian Gulf to the open ocean, making it a crucial point for the operation of the oil industry. Around 20 per cent of the world’s gas and oil is shipped through the waterway.
But Iran’s General Sardar Jabbari has said the country will now “not let a single drop of oil leave the region”, prompting international shipping to come to an effective standstill at the entrance to the passage.
It is located in the strip of sea between Iran, to the North, and Oman and UAE to the South. Iran has hit American-linked targets in UAE cities of Dubai and Abu Dhabi in recent days, meaning missiles are liable to continue flying over the strait.
Brent crude, the global benchmark for oil prices, jumped to $82 a barrel on Monday – a rise of over 10 per cent. The rate had already been at a seven-month high before Saturday’s attack, reaching $73 a barrel.
The figure now sits at $81.82 a barrel on Tuesday.
This is likely to continue to rise, experts warn, with a prolonged conflict having potential to create record-breaking price hikes in the UK.
Edmund King, president of the AA, has warned that the significant disruption to the oil trade could bring this situation about within the month.
“The turmoil and bombing across the Middle East will surely be a catalyst to disrupt oil distribution globally, which will inevitably lead to price hikes,” Mr King told The Times.
