Heating oil: UK domestic prices could increase amid Iran war - as homes warned over central heating costs
This article contains affiliate links. We may earn a small commission on items purchased through this article, but that does not affect our editorial judgement.
Households have seen bills jump almost overnight as markets react to Middle East tensions 🏠
- Rising global oil prices linked to the Middle East conflict are pushing up the cost of heating oil in the UK
- Around 1.5 million homes rely on heating oil, particularly in rural or off-grid areas.
- Some households have seen quotes for 1,000 litres jump by more than £300 since January
- Unlike gas and electricity customers, heating oil users are not protected by the Ofgem energy price cap
- Experts warn prices could continue to fluctuate if disruption to global oil supplies continues
Rising oil prices triggered by conflict in the Middle East are already pushing up the cost of petrol and diesel, but for some UK households, the impact may be even more immediate.
Around 1.5 million homes across the UK rely on heating oil rather than gas to warm their homes, and for these households, the turmoil in global oil markets can translate directly into higher heating costs, sometimes within days.
Recent volatility in oil markets has already pushed heating oil prices sharply higher, with some customers seeing quotes jump by hundreds of pounds compared with earlier this year.
Here’s what’s happening and what it could mean for households that depend on heating oil.
Why is the Middle East conflict affecting oil prices?
The price of oil has surged as tensions escalate in the Middle East, one of the world’s most important energy-producing regions.
The global benchmark, Brent crude, has climbed above $100 (£75) a barrel for the first time in nearly four years, and briefly approached $120 (£90). That’s a rise of roughly 60% since the conflict began.
Markets have been rattled by fears that oil supplies could be disrupted after Iran targeted energy infrastructure across the region in response to US and Israeli strikes.
One of the biggest concerns is the security of the Strait of Hormuz, a narrow waterway through which around 20% of the world’s oil and gas is transported on Iran’s south coast.
Iran has warned ships not to use the route, raising the prospect that a major global energy supply route could be disrupted.
At the same time, some energy producers in neighbouring countries have begun scaling back operations, such as state-backed producer QatarEnergy, which has halted some liquefied natural gas production after attacks on its facilities.
When supply is threatened, oil markets often react quickly, pushing prices higher as buyers scramble to secure shipments.
How is it affecting heating oil customers?
Households that use heating oil are more vulnerable to global price shocks than those connected to the gas grid.
That’s because heating oil is a petroleum product derived directly from crude oil, meaning its price closely follows movements in global oil markets.
Unlike gas and electricity customers, people who rely on heating oil are also not protected by the energy price cap set by the regulator Ofgem. This means prices can rise or fall much more quickly in response to market changes.
Advocacy groups say this leaves some households particularly exposed when geopolitical events send oil prices soaring.
Are heating oil prices already rising?
There are early signs that prices are already climbing, and according to the End Fuel Poverty Coalition, heating oil prices have jumped by as much as £100 as global markets react to the conflict.
One customer was reportedly quoted £985 for 1,000 litres of heating oil, compared with £670 for the same amount in January.
Because heating oil is typically purchased in bulk deliveries rather than through monthly bills, price changes can have a significant impact when households need to refill their tanks.
The problem is exaggerated in areas where heating oil is widely used, such as homes in rural or off-grid areas where alternatives such as mains gas are not available.
Could prices rise further?
Heating oil prices are likely to remain closely tied to global oil markets in the coming weeks.
Analysis by the Energy and Climate Intelligence Unit suggests that when crude oil trades at $100 a barrel, petrol prices typically reach around 150p per litre, with higher oil prices pushing fuel costs even further.
Because heating oil is also refined from crude, the same market pressures can push up the cost of home heating fuel.
If disruption to oil shipments continues, particularly around the Strait of Hormuz, wholesale energy prices could remain elevated. But prices can also fall quickly if tensions ease or supply routes reopen.
What has the Government said?
Ministers have acknowledged that households using heating oil are particularly vulnerable to market swings.
Speaking in Parliament, Energy Secretary Ed Miliband said people who rely on heating oil are “more exposed” to global price movements than those protected by the energy price cap.
The Government says it is monitoring the situation closely as part of wider efforts to address rising living costs.
Meanwhile, Chancellor Rachel Reeves is expected to join emergency talks with other finance ministers from the Group of Seven (G7) nations to discuss the global energy shock on Monday (March 9).
One option under discussion is a coordinated release of oil from strategic reserves through the International Energy Agency, which could help stabilise markets in the short term.
With household expenses continuing to rise and energy bills still higher than pre-crisis levels, more people are turning to Utility Warehouse (UW) to save money. UW lets you bundle services like broadband, mobile, energy and insurance into one streamlined account—reducing hassle while unlocking multi-service discounts. The more you bundle, the more you save.
Customers benefit from a single monthly bill, up to £400 towards early exit fees, and access to cashback on everyday spending. UW also offers the UK’s cheapest variable energy tariff when bundled, helping shield households from further price hikes.