The price of Brent crude has surged to $119 (£90) per barrel, nearing its peak since the onset of the US-Israel conflict with Iran. This spike comes in the wake of intensified US-Israel airstrikes that began on February 28, prompting Iran to effectively block the Strait of Hormuz, a critical conduit for global oil shipments. The ramifications of this situation are being felt worldwide, with fuel prices soaring to their highest levels in years.
Global Reactions to Rising Oil Prices
As wholesale oil prices climb, nations are adopting varied strategies to mitigate the economic fallout. Australia has implemented free bus travel in a bid to lessen the burden on commuters, while Egypt is urging businesses, including shops and restaurants, to close earlier to conserve energy.
In the United States, the average cost of petrol at the pump has crossed the $4 a gallon mark for the first time in almost four years, according to the American Automobile Association (AAA). Meanwhile, in the UK, petrol prices have reached 152.8p per litre, marking a two-year high and an increase of around 20p since the conflict began. The average price of diesel has also jumped to 182.77p, the highest since December 2022, and 40p above pre-war levels.
Simon Williams, head of policy at the RAC, indicated that petrol prices might stabilise if oil costs do not escalate further, although diesel prices are likely to continue climbing.
The Jet Fuel Shortage
The airline industry is feeling the pinch, particularly regarding jet fuel prices, which are on the rise. The final shipment of jet fuel from the Middle East to the UK is scheduled to arrive this week, as reported by data analytics firm Vortexa. This shipment, originally noted by the Financial Times, is expected to dock on Thursday or Friday.
Mick Strautmann, a market analyst at Vortexa, highlighted the unusual nature of having no jet fuel cargoes en route from the Middle East to the UK, as there were typically eight such shipments at any given time in 2025. A UK government spokesperson confirmed that jet fuel deliveries are still reaching the country but acknowledged that reliance on suppliers from India, the USA, and the Netherlands may not fully compensate for the loss of Middle Eastern supplies.
Strautmann pointed out that India is currently prioritising exports to Southeast Asia due to high prices and shorter transport distances, impacting the volume of jet fuel available for the UK.
George Shaw, a senior insight analyst at Kpler, noted that the shipment arriving shortly was loaded at a Red Sea refinery, successfully avoiding the Strait of Hormuz. He confirmed that the last vessels carrying jet fuel that transited this critical waterway would be discharging in Europe this week.
Airline Responses to Fuel Price Increases
In response to soaring fuel costs, European airlines are adjusting their pricing strategies. Air France-KLM has announced plans to hike long-haul ticket prices, while Scandinavian airline SAS is not only raising fares but also cutting as many as 1,000 flights in April. British Airways’ parent company, International Airlines Group (IAG), however, has stated that it has no immediate intentions to increase prices, having hedged its fuel costs through prior contracts. EasyJet is also warning that ticket prices may rise later in the summer when its hedging arrangements expire.
A spokesperson for Airlines UK reassured that the supply of jet fuel remains stable, and airlines are actively consulting with fuel suppliers and government officials to stay updated on the situation.
Why it Matters
The escalating oil prices serve as a stark reminder of the interconnectedness of global energy markets and geopolitical events. With rising costs affecting everything from household budgets to airline operations, the economic ripple effects are likely to be profound and far-reaching. As nations navigate the challenges posed by these price hikes, the strategies they employ will shape both immediate consumer behaviour and the long-term landscape of energy consumption and policy.
