British drivers could face record-high petrol prices if a conflict involving Iran were to disrupt global oil supplies, according to a stark warning from the RAC Foundation. The transport policy think tank has outlined the potential for pump prices to soar well beyond current levels, placing significant strain on household budgets and the broader UK economy.
The primary concern centres on the Strait of Hormuz, a narrow waterway between Iran and Oman, which is a vital chokepoint for approximately 20% of the world's total petroleum liquids consumption. Any military action or political instability in this region could severely impede the passage of oil tankers, leading to a sharp increase in global crude oil prices. The RAC Foundation's analysis suggests that even a modest 10% rise in the price of crude oil could translate to an additional 5p per litre at UK petrol pumps.
Such an increase would have tangible consequences for British motorists. For a typical family car with a 55-litre fuel tank, a 5p per litre hike would add £2.75 to the cost of a full tank. If prices were to reach the levels seen during previous oil crises, or even surpass the record highs of 2022 when petrol briefly hit an average of 191.53p per litre, the financial burden on drivers would be substantial. This would impact daily commutes, the cost of goods transport, and the profitability of businesses reliant on road logistics.
The UK Government, through the Foreign Office, typically advises against all but essential travel to certain regions, including parts of Iran, due to heightened tensions. While direct military involvement from the UK in such a conflict remains hypothetical, the economic ripple effects would be immediate and far-reaching. The Department for Energy Security and Net Zero would likely monitor oil markets closely, but the UK's reliance on global oil prices means it has limited direct control over pump costs.
Beyond the immediate impact on drivers, sustained high fuel costs could trigger wider inflationary pressures across the UK. Businesses would face increased operational costs, potentially passing these on to consumers through higher prices for goods and services. This scenario could further complicate the Bank of England's efforts to control inflation and could dampen consumer spending, potentially slowing economic growth.
Source: RAC Foundation