The US-Israel war with Iran has unsettled crude oil markets, with wholesale prices swinging sharply as production and transportation of energy across the Middle East are disrupted, according to BBC reporting.
Crude Oil Supply Disruption
Crude oil is a key ingredient in petrol and diesel, and the war has directly threatened supply routes. The Strait of Hormuz, a critical chokepoint for global oil shipments, has been affected, though the article notes that even if the strait reopens, it will take time for oil — and economic activity — to flow freely again. The production and transportation of energy across the Middle East have been disrupted, the BBC reports, without specifying the extent of production cuts.
Refined Product Price Volatility
Wholesale price movements take about a fortnight to filter through to the pump, the RAC explains. Since the war began, petrol and diesel prices have hit notable peaks before easing recently.
| Fuel | Iran-War Peak Price | Peak Date | Latest Price (mid-June) |
|---|---|---|---|
| Petrol (p/litre) | 159.53 | 28 May | ~157 |
| Diesel (p/litre) | 191.54 | 15 April | ~178 |
Source: RAC, as cited by BBC.
The RAC expects further falls in prices at the pump. The cost to fill a 55-litre family car with diesel now stands at £97.22, which is £18.91 more than before the conflict (28 February). A petrol tank costs £85.74, £12.68 more than at the start of the war.
Impact on Energy Markets
Higher wholesale costs faced by fuel suppliers are feeding through to end-users. For household energy, Ofgem's price cap in England, Wales, and Scotland will rise by 13% in July, driven largely by higher gas charges, as the wholesale gas costs are passed on. The UK government has indicated potential targeted support for bills if needed in winter, but a universal scheme has not been revived. The article stresses that prices from October remain highly uncertain.
For commodity traders and procurement teams, the key takeaway is that crude oil price volatility is likely to persist as long as the conflict disrupts Middle East production and tanker routes. The RAC's expectation of further petrol price falls suggests that wholesale crude may be easing, but the two-week lag means pump prices will only reflect recent market moves gradually. Monitoring the reopened Strait of Hormuz and any production restarts will be essential.
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