UK petrol prices reach their highest level since 2022.

Petrol prices in the UK have reached their highest level since the start of the Iran war, with oil prices rising back to $100 per barrel following new US military actions.

The current average price for a litre of petrol in the UK is 159.43p, as reported by the RAC.

This price is the highest since December 2022 and is 26.6p more than it was on February 28, when the US and Israel commenced their strikes on Iran.

In contrast, diesel prices remain below their peak from mid-April, currently at 184.96p per litre, which is 6.58p lower than on April 15.

Chancellor extends fuel duty cut

Filling a 55-litre diesel tank now costs £101.73, which is over £23 more than at the conflict's outset, according to the RAC.

Earlier in the conflict, the RAC highlighted that diesel had become disproportionately more expensive than petrol, jeopardizing many UK tradesmen who rely on vans.

The increase in fuel prices has intensified pressure on the government to maintain its freeze on fuel duty, with Rachel Reeves confirming last week that the tax cut would continue.

The Chancellor’s extension of the 5p cut is part of broader efforts to alleviate the rising cost of living attributed to the Iran war, which a senior cabinet member cautioned could last for eight months after the conflict concludes.

The recent spike in petrol prices coincided with oil rising back to $100 per barrel, despite a slight decline in previous days.

Oil prices had previously dropped amid indications that a ceasefire between the US and Iran might be approaching.

However, President Trump's Monday statement indicating he would accept only a “great deal or no deal” was followed by renewed US strikes on Iranian missile sites and vessels.

Iran also intensified its rhetoric, with supreme leader Mojtaba Khamenei warning the US that it would no longer have a safe haven from Gulf powers in the area.

Oil jumps on fresh Iran tensions

Neil Wilson, an investor strategist at Saxo Markets UK, noted that oil prices rebounded following renewed US military activity around Iran and the Strait of Hormuz, which partially reversed Monday’s sharp drop in crude prices.

“Investors are closely watching whether energy markets will stabilize or if higher oil prices will start to impact inflation expectations and bond yields,” he said.

The FTSE 100 rose approximately 0.6 percent, while stock markets in Germany and France declined, and gilt yields fell further to 4.86 percent.

The hopes for an imminent ceasefire deal were quickly dashed, leading to a “messy” day for the markets, according to IG analyst Rich McDonald.

“At best, the ceasefire seems to have been extended; discussions are ongoing, which reduces the immediate risk of a fresh shock at Hormuz – but significant issues remain unresolved.

“Topics such as enriched uranium, sanctions, regional security, and the normalization of Strait of Hormuz flows are all still pending, with markets now awaiting updates from the current negotiations,” he stated.