The price of Brent crude oil has surged to $119 (£90) per barrel, nearing levels not seen since the onset of the ongoing conflict between Israel and Iran. This spike comes in the wake of US-Israeli air strikes that commenced on February 28, leading to Iran’s effective blockade of the Strait of Hormuz, a pivotal route for oil shipments. Consequently, wholesale oil prices are on the rise, prompting significant increases in fuel costs worldwide.
Strain on Global Oil Supply
The ongoing geopolitical tensions have led to a ripple effect in the energy market. The Strait of Hormuz, a critical maritime passage for oil transport, is vital for a substantial portion of the world’s oil supply. With Iran’s actions impeding access, the ramifications are being felt globally, particularly in fuel prices. In the United States, petrol prices have surged past $4 per gallon for the first time in nearly four years, according to the American Automobile Association (AAA).
In the UK, the price of petrol has reached 152.8p per litre—the highest it has been in two years and around 20p higher than prior to the conflict. Diesel prices have also seen a significant uptick, averaging 182.77p, marking a 40p increase since the beginning of hostilities. Simon Williams, head of policy at the RAC, indicated that while petrol prices may stabilise if oil costs do not escalate further, the outlook for diesel remains precarious.
Governments Respond to Rising Costs
Countries are implementing various strategies to mitigate the impact of soaring oil prices. In Australia, authorities have introduced free bus travel as a measure to alleviate the financial burden on commuters. Meanwhile, Egypt has mandated early closing times for shops and restaurants to reduce energy consumption, demonstrating the diverse approaches nations are taking to manage the crisis.
In the UK, there are additional concerns as average energy bills are projected to rise by £288 annually for a typical dual-fuel household starting in July. This increase compounds the financial strain on consumers already grappling with elevated fuel prices.
Impact on Aviation Sector
The airline industry is not immune to these developments. The price of jet fuel has spiked significantly, with the last shipment en route from the Middle East to the UK expected to arrive this week. According to Vortexa, a data analytics firm, the current situation is unusual, as there were typically eight cargoes making the journey at any given time in 2025.
Mick Strautmann, a market analyst at Vortexa, noted that although the UK continues to receive jet fuel from other sources, including India and the USA, the prioritisation of Southeast Asia by Indian suppliers is exacerbating the issue. George Shaw, a senior analyst at Kpler, confirmed that the jet fuel shipment arriving this week was sourced from a Red Sea refinery, notably avoiding the Strait of Hormuz.
In response to escalating fuel costs, European airlines are beginning to adjust their pricing strategies. Air France-KLM has announced plans to raise long-haul fares, while Scandinavian carrier SAS intends to reduce its flight schedule by 1,000 in April. In contrast, British Airways’ parent company, IAG, has hedged its fuel costs and indicated no immediate plans for fare increases.
Why it Matters
The recent surge in oil prices underscores the intricate links between geopolitical events and global economic stability. As nations grapple with rising fuel costs and the potential for broader economic repercussions, the choices they make in response will have lasting implications not only for consumers but also for international trade and energy security. With inflationary pressures mounting, the ongoing situation in the Middle East will continue to be a focal point for analysts and policymakers alike, shaping the trajectory of the global economy in the months to come.
