The price of Brent crude oil has soared to $119 (£90) per barrel, nearing its highest levels since the onset of the US-Israel conflict with Iran. This spike follows Iran’s strategic closure of the Strait of Hormuz, a vital artery for global oil shipments, in response to recent air strikes. With fuel costs surging across the globe, countries are adopting varying measures to mitigate the impact on their economies.
Rising Fuel Prices Impact Households
As oil prices climb, consumers are feeling the pinch at the pump. In the United States, petrol prices have surged to over $4 a gallon—the highest in nearly four years, according to the American Automobile Association (AAA). Meanwhile, in the UK, the cost of petrol has reached 152.8p per litre, representing an increase of approximately 20p since the conflict began. Diesel prices have also escalated, averaging 182.77p, which is a staggering 40p higher than pre-war levels.
Simon Williams, head of policy at the RAC, commented on the situation, noting, “If the cost of oil doesn’t increase further, petrol prices might stabilise, although diesel appears likely to continue its upward trend.” The crisis is not limited to fuel; average energy bills for UK households are expected to rise by an additional £288 annually from July, exacerbating the financial burden on consumers.
Jet Fuel Supply Under Pressure
The aviation sector is feeling the effects of soaring oil prices as well, particularly concerning jet fuel. A significant shipment of jet fuel from the Middle East to the UK is expected to arrive this week, a notable event given that there are currently no other shipments in transit. Mick Strautmann, a market analyst at Vortexa, remarked on the rarity of this situation, stating, “In 2025, there was an average of eight cargoes en route from the Middle East to the UK at any one time, so having none in transit is quite unusual.”
Despite concerns, a UK government spokesperson assured that jet fuel imports from various countries, including India, the USA, and the Netherlands, continue as scheduled. However, Strautmann highlighted that India is prioritising exports to Southeast Asia due to higher prices and shorter transport distances, limiting the UK’s options.
Airlines Respond to Increased Costs
In response to rising fuel costs, airlines are beginning to adjust their pricing strategies. Air France-KLM has announced plans to hike long-haul fares, while Scandinavian Airlines (SAS) will reduce its flight offerings and raise ticket prices. Conversely, British Airways’ parent company, IAG, has stated it has no immediate plans to increase fares, having hedged its fuel costs prior to the conflict. EasyJet has indicated that ticket prices may rise later in the summer as their hedging contracts expire.
Despite these adjustments, Airlines UK confirmed that there has been no disruption in jet fuel supply, with ongoing engagement between airlines, fuel suppliers, and the government to monitor the situation closely.
Why it Matters
The surge in oil prices amidst geopolitical tensions underscores the fragility of global supply chains and the potential for widespread economic disruption. As fuel costs continue to rise, consumers and businesses alike will face increasing financial strain, prompting governments to adopt various strategies to mitigate the impact. This situation serves as a stark reminder of how interconnected our economies are and the far-reaching consequences that can arise from regional conflicts.
