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The Israel-US attack on Iran has hit motorists around the world as disruption to supplies of crude oil and refined products from the Middle East pushes up prices of petrol and diesel.
The US average price of petrol climbed to $3.49 per gallon on Monday, up from about $3, in the highest weekly jump since Russia’s full-scale invasion of Ukraine, according to data from the American Automobile Association.
Brent crude surged above $110 per barrel on Monday before paring back to around $100 by midday in New York, as the Strait of Hormuz remained nearly impassable.
US President Donald Trump, who campaigned for the presidency in 2024 in part on bringing down pump prices, said in a post on Truth Social on Sunday night that “short term oil prices” were a small price to pay for “world peace”, and would fall rapidly “when the destruction of the Iran nuclear threat is over”.
The president continues to face an affordability crisis as the November congressional elections approach.
But analysts warned the situation was severe. “If all we’d lost was [refined] product then the system would cope because refineries elsewhere would be able to run a bit harder and replace it,” said Alan Gelder, refining expert at Wood Mackenzie. “But the issue is we’ve lost 12-14mn barrels per day” of unrefined oil.
Gelder said that exceeded the roughly 10mn barrels per day of demand that was lost on average in 2020 after state-imposed Covid-19 lockdowns caused people to stop driving and flying — implying significant price increases would be needed to rebalance the market.
UK motoring groups advised drivers to adjust their travel following a 5p jump in petrol prices to 137.5p and a 9p rise in diesel prices to 151p per litre since the conflict began.
Edmund King, president of the Automobile Association, said drivers should “consider cutting out some non-essential journeys and changing their driving style to conserve fuel”.
Simon Williams, head of policy at the RAC, suggested “driving efficiently by avoiding harsh accelerating and braking”.
The recommendations raise echoes of the 1973 oil crisis sparked by the Arab oil embargo, when the UK government urged motorists to reduce their use of petrol including by cutting driving speeds.
Meanwhile, China, the world’s second-largest oil consumer, has raised price limits on petrol by Rmb695 ($100.61) per tonne and on diesel by Rmb670 ($97) per tonne, according to a notice from the National Development and Reform Commission seen by the FT. The move will feed through to higher prices at the pump.
Elsewhere, South Korea’s and Thailand’s governments both moved to cap pump prices. In India, government-owned refiners have, so far, shielded consumers from petrol and diesel price increases.
However, the price of liquefied petroleum gas — a refinery byproduct used by hundreds of millions of households and businesses for cooking — has increased roughly 7 per cent to Rs913 for a 14.2kg cylinder in Delhi.
Data visualisation by Janina Conboye and Alan Smith
Additional reporting by Ed White in Shanghai and Krishn Kaushik in Mumbai