UK Diesel Prices Hit All-Time High Amid Middle East Conflict

Global Supply Disruptions Push Fuel Costs to New Uncharted Territory

Geopolitical tensions in the Middle East continue to dictate domestic energy expenses across the United Kingdom. Simon Williams, head of policy at the motoring organisation RAC, noted that diesel prices have crossed previous records. The prior peak of 199.09p was recorded in June 2022 following Russia’s invasion of Ukraine.

Prices face upward pressure because Donald Trump rejected Iran’s proposal for a seven-day peace deal aimed at reopening the Strait of Hormuz. Brent crude, the international benchmark for oil prices, traded at approximately $72 a barrel prior to the US-Israeli attack on Iran in February. The benchmark peaked at $126 a barrel in April before dipping to $71 at the start of July on hopes of a peace settlement. By Monday, oil prices climbed more than 2% to reach $106.5 a barrel.

Wider Economic Impact on Supply Chains and Consumers

Increased fuel expenditures threaten operational margins across multiple business sectors. Dr Jonathan Owens, an operations and supply chain expert at the University of Salford, stated that the consequences reach nearly every facet of economic life, affecting supermarkets, manufacturing, construction, agriculture, and e-commerce.

Commercial road freight operators bear the brunt of these escalating operational expenses. Hauliers and distribution centers face immediate margin compression as fuel surcharges mount.

Rising logistics costs inevitably transfer down the commercial chain. “These increased costs will be passed on to consumers,” Williams explained, warning that household budgets face mounting pressure alongside commercial entities.

Petrol Prices and Government Policy Responses

Petrol prices are also climbing, with the average price of a litre reaching 174.13p. Filling a full petrol tank now costs approximately £96, marking a 31% increase since February 28. Meanwhile, output from Russia’s war-damaged refineries has dropped by nearly a third over the past year to a 20-year low, hampered by sustained drone attacks from Ukraine according to the International Energy Agency.

To combat soaring costs, Donald Trump stated he is considering a US diesel export ban and urged Ukrainian President Volodymyr Zelenskyy to pause strikes on Russian oil refineries. Within the UK, the government extended a 5p cut in fuel duty until the end of the year. However, the RAC warns that fully reversing this cut by the spring will automatically add another 5p a litre to pump prices.

The Competition and Markets Authority published a report in August revealing that many petrol stations delayed passing wholesale energy price drops on to customers. While overall pump costs declined in June, prices remained elevated above pre-conflict levels, keeping retailer profit margins at or above historical highs set in 2025, though investigators found no explicit evidence of profiteering.