Warning to drivers as fuel prices set to soar if conflict in Middle East continues to escalate
FUEL prices could soar if the Middle East conflict escalates, drivers were warned last night.
The cost of oil climbed by around five per cent in just two days to $76 per barrel, as Israel vowed to retaliate against Iranian missile strikes.
One option open to the Israeli military is to hit Iran’s oil refineries — which despite western sanctions still supply many countries worldwide.
Analysts said a major escalation could take the oil price to $100 a barrel — driving up pump costs for motorists.
The warning comes at a time when petrol prices here have been falling.
They were down 6.5p a litre in September, putting £3.60 back into drivers’ pockets every time they fill up a 55-litre tank.
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Petrol is now 134.9p a litre and diesel 139.5p — marking one of the biggest price drops in 24 years, the RAC says.
A second threat to prices is the Budget on October 30.
Chancellor Rachel Reeves will have to decide whether to keep the current fuel duty freeze, as well as a 5p reduction brought in by the Tories.
The Sun’s Keep It Down campaign has saved drivers £90billion in tax over 14 years.
AA boss Edmund King said: “Global oil prices tend to increase with any geo-political uncertainty.
“The Government should avoid the temptation to hike fuel duty in the Budget as drivers and industry would face a double hit.”
Fawad Razaqzada, analyst at City Index, said: “The extent of Israel’s response to Iran will influence how much geopolitical risk markets factor in. Crude oil could rise another $5 in the next few days if we see further escalation in the conflict.”
Bjarne Schieldrop, chief commodities analyst at SEB, warned a major escalation in tensions could push oil prices to $100 a barrel.
And David Oxley, of Capital Economics, said such a rise could add 13p to the cost of a litre.
About a fifth of global oil comes from the Gulf region.