The price of Brent crude oil has surged to an alarming $119 (£90) per barrel, edging closer to its highest level since the outbreak of the US-Israel conflict with Iran. The escalation of air strikes that commenced on 28 February has seen Iran effectively shutting off the Strait of Hormuz, a critical artery for global oil shipments. This geopolitical turmoil is pushing wholesale oil prices higher, leading to a sharp increase in fuel costs for consumers worldwide.
Global Fuel Prices on the Rise
The ripple effects of these soaring oil prices are being felt across the globe. In the United States, petrol prices have climbed past $4 per gallon for the first time in almost four years, according to data from the AAA motoring organisation. Meanwhile, in the UK, the cost of petrol has reached 152.8p per litre—the highest level in two years—marking an increase of around 20p since the onset of the conflict. Diesel prices are also seeing significant hikes, averaging 182.77p, a figure that exceeds December 2022 levels by 40p.
Simon Williams, head of policy at the RAC, commented that while petrol prices might stabilise if oil costs do not escalate further, the outlook for diesel appears less optimistic, suggesting that prices could continue to climb. Additionally, average energy bills in the UK are projected to rise by £288 annually from July for a typical dual-fuel household, compounding the financial strain on consumers.
Airlines Feel the Pinch
The aviation sector is not immune to these price hikes. Jet fuel costs are surging, with the last shipment from the Middle East expected to arrive in the UK this week. Vortexa, a data analytics firm, indicated that this particular shipment, which is anticipated later this week, is noteworthy because it is the sole cargo in transit from the region—a stark contrast to the average of eight shipments seen in 2025.
Mick Strautmann, a market analyst at Vortexa, highlighted that while the UK continues to receive jet fuel from countries like India, the US, and the Netherlands, the prioritisation of exports to Southeast Asia by India is impacting availability. George Shaw, senior insight analyst at Kpler, confirmed that the current shipment has not traversed the Strait of Hormuz, which has been a focal point of concern for fuel supply.
In response to the rising costs, many European airlines are adjusting their pricing strategies. Air France-KLM plans to increase long-haul fares, while Scandinavian Airlines (SAS) has announced price hikes and a reduction of 1,000 flights in April. British Airways’ parent company, IAG, has managed to stabilise its costs through fuel hedging, locking in prices before the conflict escalated. EasyJet has warned that ticket prices may rise as its hedging arrangements expire later this summer.
Varied Responses to Energy Crisis
Countries around the world are implementing diverse strategies to cope with escalating energy costs. Australia has introduced free bus travel to ease the burden on commuters, while Egypt has mandated early closures for shops, restaurants, and cafes to conserve energy. These measures reflect the urgency of addressing the economic fallout from rising fuel prices.
As nations grapple with the implications of this energy crisis, the balance between consumer relief and economic stability remains delicate.
Why it Matters
The rising oil prices are not merely a statistic; they represent a significant strain on household budgets and business operations globally. As costs continue to climb, the potential for inflationary pressures to escalate rises, complicating economic recovery efforts in the wake of the pandemic. With the geopolitical landscape in flux, the world watches closely, anticipating further developments that could shape the future of energy markets for months to come.
