Oil nears highest price since start of Iran war

 

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The global benchmark brent crude oil price has hit $119 (£90) per barrel, close to its highest since the start of the US-Israel war with Iran.

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 Iran has effectively blocked the Strait of Hormuz, an important route for oil-carrying ships, in response to the air strikes launched by Israel and the United States on February 28. Wholesale oil prices have surged since and car fuel prices have jumped to their highest in years.

 Countries are responding differently to rising oil prices, with Australia making bus travel free while Egypt asks shops, restaurants, and cafes to close early to cut energy use.

 In the US, petrol prices at the pump topped $4 a gallon in the US for the first time in nearly four years, according to the AAA motoring organisation.

 According to the motoring organization RAC, the price of gasoline in the UK has reached 152.8p per liter, its highest level in two years and approximately 20p higher than it was at the beginning of World War II. The average diesel price increased to 182.77 pence, 40 pence more than it had been at the beginning of the war and its highest level since December 2022. According to Simon Williams, the head of policy at the RAC, "if the cost of oil does not increase further, although diesel still looks likely to rise," the price of gasoline may stabilize.

A typical dual-fuel household in the UK is expected to see an increase in annual energy costs of £288 starting in July.

Last shipment of jet fuel

In the meantime, the rising cost of jet fuel has had an impact on airlines as well. According to Vortexa, a data company, the final shipment of jet fuel traveling from the Middle East to the UK is scheduled to arrive this week. The shipment, first reported by the Financial Times, is due to arrive on Thursday or Friday.

 "In 2025 there were an average of eight cargoes en route from the Middle East to the UK at any one time, so having none en route is quite unusual," said Mick Strautmann, market analyst at Vortexa.

 According to a spokesperson for the UK government, shipments of jet fuel are continuing to arrive in the nation. "The UK receives imports of jet fuel from India, USA and the Netherlands as well as smaller amounts from a range of other countries," the spokesperson added.

However, despite the fact that India has traditionally supplied the UK with jet fuel, "they are prioritizing exports to Southeast Asia at the moment given very high prices and shorter distances," according to Strautmann. He stated, "There have been some loads from West Africa, the US, and to a lesser extent the Netherlands and France" that have traveled to the United Kingdom, "but overall volumes do not make up for the loss from the Middle East." According to George Shaw, senior insight analyst at Kpler, the shipment that arrived this week was not through the Strait of Hormuz but rather was loaded at a refinery in the Red Sea. He stated, "This week, the last of the vessels that loaded up with jet fuel and passed through the Strait of Hormuz will discharge into Europe." Air France-KLM, a European airline, has announced that it will raise long-haul fares to offset rising fuel costs, while SAS, a Scandinavian airline, has raised prices and announced that it will cut 1,000 flights in April. IAG, the owner of British Airways, has stated that it has no immediate plans to raise prices because it has hedged its fuel costs by signing contracts to purchase fuel at a fixed price prior to the conflict. When its hedging agreements come to an end at the end of the summer, EasyJet has said that ticket prices might go up. "UK airlines are currently not seeing disruption to jet fuel supply and continue to engage with fuel suppliers and government to monitor the situation," stated a spokesperson for Airlines UK.

Source: BBC