Oil prices have surged to their highest level since 2022, as President Donald Trump appears to be preparing for an escalation of the conflict with Iran. The cost of benchmark Brent crude soared past £94 a barrel, up nearly 7%, reaching a high not seen since Russia’s invasion of Ukraine in 2022.
Why Are Oil Prices Rising?
Hopes for a resolution to the Iran war and the reopening of the crucial Strait of Hormuz shipping route have been dashed. Peace talks between the US and Iran have broken down, and Trump has rejected Iran’s proposals to reopen the strait. He is now preparing to launch a series of strikes on Iran, which would end the fragile ceasefire.
Impact on UK Motorists and Inflation
The surge in oil prices will likely lead to further increases at petrol pumps, with fears that the global energy shock will drive up UK inflation. In March, Larry Fink, CEO of BlackRock, told the BBC that if the conflict is not settled, there could be 'years' of high prices and a 'stark and steep recession'. He described rising energy prices as 'a very regressive tax' that affects the poor more than the wealthy.
Thomas Sampson, associate professor of Economics at the London School of Economics (LSE), told Metro that while a recession is possible, it will depend on the severity and duration of the oil shock. Weeks of intensifying attacks in the Middle East, disruption to energy production, and shipping delays in the Strait of Hormuz are all likely to have significant impacts on the global economy.
Advice for Drivers
In early March, when oil prices surged, motorists were urged to stop 'non-essential journeys' to save money. Edmund King, president of the AA, is urging Brits to make fewer journeys and to adopt more fuel-efficient driving styles. He said: 'The longer this conflict goes on, the more effect it will have on the cost of oil. Any time Brent Crude passes 100 dollars per barrel raises concern across the markets, for the haulage industry and drivers. There will be gradual increases in pump prices, but this shouldn’t happen overnight as fuel has been purchased at previous prices.'
The situation remains fluid, and further developments in US-Iran relations will be critical in determining the path of oil prices and their impact on the UK economy.
