Oil prices today: Brent crude price down on Iran war hope, will cost of local UK petrol, diesel and fuel drop?
Global energy supplies remain fragile and the impact on drivers may take time to filter through ⛽
- Oil prices have fallen sharply after hopes emerged that the Iran war could end sooner than feared
- Brent crude dropped more than 8% after surging above $100 a barrel during market panic
- The conflict has disrupted major energy routes, including the vital Strait of Hormuz shipping lane
- Even after the recent drop, oil prices remain more than 25% higher than before the war began
- UK petrol and diesel prices may eventually ease, but pump prices usually take longer to fall
Oil prices have dropped sharply after hope emerged that the war involving Iran could end sooner than feared.
The shift has calmed financial markets after days of turbulence that pushed crude oil above $100 (£74) a barrel and raised concerns about rising fuel costs around the world.
But while wholesale oil prices have fallen from their recent peak, that doesn’t necessarily mean drivers in the UK will see cheaper petrol and diesel immediately.
The global energy market remains volatile, and prices at the pumps tend to lag behind changes in crude oil costs. So what’s actually happening, and could fuel prices really start falling?
Why does the Middle East conflict affect UK fuel prices?
Even though the UK produces some of its own oil and imports fuel from multiple regions, global oil markets are highly interconnected.
When supply disruptions occur anywhere in the world, particularly in a major producing region like the Persian Gulf, prices tend to rise everywhere.
That’s partly because traders anticipate shortages and bid up prices, but also because oil is largely priced globally rather than regionally.
The war has already threatened key energy infrastructure across the Gulf, including pipelines, refineries and export terminals. More crucially, the fighting has effectively closed the Strait of Hormuz to many shipments.
This narrow waterway is one of the most important energy routes on Earth, carrying roughly 20% of global oil and liquefied natural gas (LNG) shipments.
If supplies cannot move through the strait, large volumes of oil and gas become temporarily stranded, pushing prices higher worldwide.
How much have oil prices risen during the conflict?
Before the war began, Brent crude was trading at around $73 (£54) a barrel. At the height of the market panic, prices surged to nearly $103 (£77), an increase of more than 40%.
Although prices have now fallen from those highs, they remain more than 25% higher than before the conflict started, meaning the pressure on fuel prices hasn’t disappeared entirely.
Energy markets also remain extremely sensitive to new developments, and any escalation in the conflict, particularly one that further threatens shipping routes or oil infrastructure, could quickly send prices climbing again.
Why did oil prices suddenly fall?
The price of Brent crude, the global benchmark used to price much of the world’s oil, fell more than 8% in early trading on Tuesday (March 10).
It came after US President Donald Trump suggested the conflict involving Iran could be short-lived and may be nearing an end.
His comments helped calm markets and triggered a sell-off in oil, reversing some of the sharp gains seen earlier in the week.
Investor fears that the war could spiral into a wider regional conflict that would severely disrupt global energy supplies appear to have eased slightly, though analysts warn the situation could still change quickly.
The situation in the Middle East remains uncertain, and several critical energy facilities across the region have been disrupted by drone and missile strikes.
Some oil fields have also been forced to reduce production because storage facilities are full and exports are blocked.
Even if the conflict were to end, restarting this infrastructure could take weeks; energy analysts say that means global supply could remain tight for some time.
Will petrol prices in the UK go down?
Petrol and diesel prices in the UK are influenced by several factors beyond the cost of crude oil, including refining costs, exchange rates, distribution expenses and taxes.
Retail fuel prices also tend to react slowly to falling wholesale costs, and though pump prices usually increase quickly when oil prices rise sharply, when prices fall, it can take longer for those reductions to filter through.
If oil prices continue trending downward in the coming weeks, drivers may eventually see some relief at the pumps, but the recent spike means prices could remain elevated compared with the start of the year.
Elsewhere, Yorkshire drivers are being urged to rethink their travel plans and driving habits under drastic new advice given in response to volatile fuel prices.