The price of oil has fallen back to levels not seen since before the Iran war, handing hard-pressed UK businesses the prospect of cheaper fuel as traffic through the critical Strait of Hormuz shipping lane gradually resumes.
Brent crude, the global benchmark, briefly dipped below $72.48 (£55) a barrel, the level it sat at the day before the United States and Israel launched their attacks on Iran on 28 February, before edging back up to $73.23.
Energy markets have endured a torrid few months since Tehran retaliated by effectively closing the strait, a waterway that carries a substantial share of the world’s seaborne oil and gas. For the haulage, hospitality and agricultural firms that have watched their fuel bills balloon since the spring, the retreat in crude cannot come soon enough. Many smaller operators have spent the conflict simply trying to absorb costs they could not pass on, a squeeze Business Matters has tracked among hauliers, hotels and farms pushed into survival mode.
Crude has been falling steadily since 17 June, when Washington and Tehran signed a Memorandum of Understanding setting out a 60-day window for negotiations on Iran’s nuclear programme and other measures aimed at ending the war. Representatives from both sides met in Switzerland last weekend, talks that led the United States to partially lift sanctions on Iranian oil exports.
The number of vessels crossing the Strait of Hormuz has risen sharply since the agreement was struck, according to maritime intelligence firm Kpler. Its latest figures suggest 284 vessels made the transit from 18 June, the day after the deal was signed, although that remains well below the pre-conflict average of around 138 crossings a day. The ships passing through in recent days have included those carrying crude oil, liquefied natural gas, fertiliser and other goods, Kpler told the BBC.
The United States and Iran have also established a “communication line” to prevent misunderstandings “with the aim of safe passage for commercial vessels through the Strait of Hormuz”, mediators Qatar and Pakistan said in a joint statement on Monday.
Dimitris Maniatis, chief executive of maritime risk advisory firm Marisks, which is working with ships stranded in the region, described a “tremendous shift”, with far more vessels using the strait in recent days. A limited number of ships can cross a northern passageway with the permission of Iranian authorities, he said, while the US navy has set out a southern route cleared of mines and other obstacles laid during the war. Even so, traffic remains below the pre-war norm, when more than 100 ships a day used the route.
For drivers and the firms that run vans and lorries, attention has now turned to how quickly the fall in crude feeds through to the forecourt.
“On the back of the lowest oil price since before the Iran war started, drivers should see the average price of petrol fall below 150p [a litre] in the next week or so,” said Simon Williams, head of policy at the RAC. He added that diesel “ought to go back under 160p”. Petrol peaked at 159.53p a litre on 28 May, according to the motoring group, while diesel has eased from a high of 191.54p on 15 April. Drivers can track the daily averages through the RAC’s Fuel Watch data, and the longer-term trend is laid out in the House of Commons Library’s briefing on petrol and diesel prices.
In the United States, the average price of regular petrol has slipped to around $3.93 a gallon after touching $4 in April, its highest since 2022, though it remains well above pre-war levels.
The pace of those falls has become political. President Donald Trump on Wednesday ordered an investigation into the major energy companies, accusing Shell, ExxonMobil and others of “gouging” drivers by failing to cut pump prices even as crude costs tumbled. “Oil prices have come down so much and we are not seeing anything at the pump by comparison the way they should be,” Trump told reporters in the Oval Office. The American Petroleum Institute, which represents the US oil and gas industry, countered that fuel prices “don’t move in lockstep with crude oil”.
British energy firms have faced similar accusations of unfairly inflating petrol prices since the war began. Last month, however, the UK competition watchdog said it had found no widespread evidence of profiteering, noting that average margins were “broadly unchanged” between February and March.
For now, the direction of travel offers a measure of comfort to the millions of smaller firms for whom fuel is an unavoidable line on the balance sheet, and for whom relief has been a long time coming. Whether the easing endures will depend on whether the fragile peace holds, and on how far the broader pressure of stubbornly high energy costs on UK business continues to bite.
