UK petrol tops 161.5p as Brent holds near $80 after Iran peace talks fail

UK average petrol has reached 161.5p per litre, the highest level since the start of the Iran war, with diesel at 181.5p per litre. The Guardian reports that both figures mark a sharp reversal from early July, when the RAC recorded petrol at 150.59p and diesel at 164.52p following a US-Iran framework deal. Pump prices generally track wholesale crude, and the recent climb follows a rebound in Brent after that deal unravelled.

The mechanism is direct. Crude oil is the primary input to petrol and diesel, so movements in Brent crude, the global benchmark, feed through to the forecourt with roughly a two-week lag given the time oil takes to move and refine. Before the conflict, Brent sat near $70 a barrel; it surged above $120 during the fighting, fell back to almost $70 after the July framework deal, spiked above $100 when talks collapsed, and now hovers around $80. As a rule of thumb, every $10 rise per barrel adds around 7p per litre at the pump.

The chart below shows Brent crude over recent months, against which the swing from $70 to above $120 and back to around $80 can be read.

What this means for UK commercial buyers

If your business runs vehicles, this is a direct cost line, not a background number. The RAC's Simon Williams noted that filling a diesel family car now costs around £100, a level drivers have not seen since early June, while a petrol fill sits near £89. For fleet operators and multi-site organisations, the two-week lag means today's Brent level is already priced into next fortnight's forecourt costs.

Points to watch as the situation develops:

• Brent crude, currently around $80 per barrel
• The Strait of Hormuz, which normally carries about 20% of the world's oil and LNG
• UK petrol, now 161.5p per litre
• UK diesel, now 181.5p per litre, still below the 191.54p peak of 15 April
• The 5p fuel duty rise, deferred from September to 31 December

The closure of the Strait of Hormuz is the core supply constraint. The BBC reports the disruption has pushed the shock through to UK inflation, and even if an agreement to reopen the waterway is reached, normal shipping volumes will take time to restore. That points to a drawn-out effect on the global economy over several months.

For context, current prices remain below the summer 2022 peaks after Russia's invasion of Ukraine, when petrol hit 191.5p and diesel 199p. The Telegraph notes the £100 family-car fill as the headline pressure on households.

Watch the Hormuz negotiations and the next Brent settlement: a durable reopening would ease pump costs within a fortnight, while a further stall keeps fuel budgets under pressure into the new year.