Overnight on June 13, Israel launched a unilateral military strike against Iran, targeting nuclear facilities, missile factories, senior military officials, and nuclear scientists. Iran’s foreign minister declared the attack “an act of war,” and Iran retaliated by launching waves of drones and dozens of ballistic missiles.
Israeli Prime Minister Benjamin Netanyahu described the operation as a last-resort effort to prevent Iran from acquiring nuclear weapons. Although the Trump administration had recently resumed nuclear negotiations with Tehran, President Trump has increasingly voiced support for Israel’s objectives and redirected military resources to the region.
The escalation has raised the risk of direct military conflict between Washington and Tehran.
How much have oil prices risen?
The attacks prompted an instant reaction on the markets; however, the price is far below where it was a year earlier. It is also well below the peaks seen in 2022 following Russia's invasion of Ukraine, when it spiked to nearly $130 a barrel.
Brent Crude - the main international benchmark - rose to over $78 a barrel on Friday. Since then, it has fallen back to about $74.50, but it is still $10 higher than it was this time last month.
Nevertheless, at present fuel prices are forecasting to rise by a minimum of 5 pence per litre next week.
The price of oil rises and falls all the time in response to big geopolitical events, and the state of the global economy, so it is not a surprise to see oil prices reacting to the Israel-Iran conflict.
However, the price is far below where it was a year earlier. It is also well below the peaks seen in 2022 following Russia's invasion of Ukraine, when it spiked to nearly $130 a barrel.
So will petrol and diesel prices go up?
As most fixed price fuel cards are directly linked to wholesale fuel market, the cost of fuel moves in line with the oil market, so movement in the oil price this week will impact fuel card prices for next week.
With retail ‘pump’ priced fuel cards there is typically a 14-day lag between movements in the wholesale market filtering through to pumps, which is great on a rising market but not so good on a falling market.
A rough rule of thumb is a $10 rise in the oil price would add about 7p to the price at the pump.
Of course, more expensive energy also feeds through to higher prices for almost everything, from farming to manufacturing.
When it comes to food, higher energy costs can lead to higher prices on the shelf in many ways. It can make it more expensive to run farm machinery, to transport produce, and to process and package food.
However, that will only happen if energy prices stay high for a sustained period.
Even with petrol and diesel, rising crude prices only have a limited impact.
For further information on oil prices and the impact on fuel card prices read our weekly ‘fuel for thought’ blog which is published each Friday as available on our website, socials or by clicking a click on your price notification emails.
Alternatively, feel free to contact your Account Manger who will be happy to help.
