Fuel prices are expected to drop soon following the ceasefire agreement between the US and Iran. The deal brokered by Donald Trump and Tehran resulted in a significant decrease in oil prices, with Brent crude falling from over $110 per barrel to below $94 on Wednesday. Despite this drop, prices remain higher than the pre-conflict levels.
The impact of the crisis has been most felt by UK households in the form of increased petrol and diesel prices, prompting concerns about price gouging. The public is now anticipating forecourts to reflect the sharp decline in oil prices post the ceasefire.
According to the RAC, the current average prices for unleaded and diesel in the UK stand at 157.71p per litre and 190.62p per litre, respectively. This marks a significant increase from the prices before the conflict began.
Nigel Green, the CEO of deVere Group, predicts a decrease in petrol prices in the near future, offering some relief to drivers. However, he warns that the elevated oil prices continue to impact various sectors of the economy beyond fuel costs.
Simon Williams, the head of policy at RAC, highlighted the surge in fuel prices since the conflict started, emphasizing the uncertainty ahead for UK drivers. He urged for stability in the ceasefire, free movement of oil shipments, and sustained lower oil prices to see meaningful reductions in wholesale fuel costs.
While the ceasefire announcement led to a surge in stock markets, experts caution that the market remains volatile. Matt Britzman, a senior equity analyst at Hargreaves Lansdown, noted the positive market response to the ceasefire but emphasized the need for a more permanent resolution to stabilize oil prices.
The potential easing of interest rate hike risks, contingent on the ceasefire holding, could provide relief to borrowers. Experts believe that the return to pre-conflict oil price levels hinges on the successful reopening of the Strait of Hormuz without disruptions.
