Oil Prices Near $100 as US-Iran Conflict Drives Up Fuel Costs 2026

Oil prices near $100 per barrel have surged following renewed US attacks on Iran and Houthi strikes on Saudi tankers in the Red Sea, pushing UK petrol prices to 155.57p per litre. This escalation in Middle East tensions is reversing earlier price declines and hitting drivers hard at the pump.

Why Oil Prices Are Spiking

Brent crude reached $98.88 on Thursday, just shy of the psychologically important $100 mark, as the US launched 12 consecutive days of strikes on Iranian positions. Simultaneously, Yemen's Houthi rebels targeted Saudi oil tankers in the Red Sea, disrupting a key maritime route. Geopolitical risk premiums have added roughly $4.50 per barrel in a matter of days.

The conflict has ended hopes of a US-Iran truce, which had previously allowed diesel prices to fall as low as 164p. Now, diesel stands at 172.14p — an increase of nearly 8p in two weeks. Simon Williams, head of policy at the RAC, warned: "Fuel prices are shooting up like a rocket."

Impact on UK Drivers

The average petrol price has risen 5p in two and a half weeks, and diesel has climbed 5%. If petrol reaches 160p, it would surpass the previous Iran war high of 159.53p seen on 28 May. Drivers face stinging summertime pump prices unless the conflict ends abruptly.

Key Takeaways

• Brent crude near $100 — highest in two months — driven by US strikes on Iran and Houthi attacks.
• UK petrol up 5p to 155.57p; diesel up 8.14p to 172.14p in under three weeks.
• Geopolitical instability threatens further price hikes, with petrol potentially hitting 160p.
• EU fine on Google and EasyJet profit warnings add to a turbulent business day.

Broader Business Impact

Beyond fuel costs, the conflict is affecting airlines like EasyJet, which reported profit hits from higher oil prices. Meanwhile, the EU fined Google €890m for competition violations, and British Gas owner Centrica announced 1,300 job cuts. These events underline how global tensions ripple through multiple sectors.

Market Reactions

Analysts expect oil to remain volatile. If the US-Iran conflict escalates further, Brent could breach $100 — a level not seen since early 2022. The Red Sea attacks also threaten shipping insurance costs and supply chains, adding to inflationary pressures.

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