Last week we reported that UK fuel prices had started to fall after a framework deal between the US and Iran to end the war sent crude oil to its lowest level in three months. The RAC went further, predicting the average price of petrol would drop below 150p a litre within a week or so and diesel back under 170p, as long as oil kept trading under $80. For a few days, that looked like a safe bet.
Then the picture turned again. The deal that drove the falls was always a framework rather than a signed peace, opening a 60-day negotiation window rather than ending the conflict outright — and over the past few days that fragility has shown. The talks meant to turn the agreement into something durable were called off, Iran moved to shut the Strait of Hormuz once more, and the oil price stopped falling and began edging back up.
This is exactly the risk we flagged: When we covered the falls last week, we cautioned that a framework deal is not a signed peace and that the recent drops could reverse just as quickly if talks broke down. We've watched the same pattern before, when an earlier ceasefire faltered and prices climbed straight back. That caution now looks well placed.
What actually happened this week
The unravelling came in quick succession. A mediator confirmed the memorandum of understanding required Iran to reopen the Strait promptly in exchange for the US lifting its naval blockade of Iranian ports. But within days, Iran announced it was re-closing the Strait of Hormuz on 20 June, blaming Israeli military action for breaching the agreement — a claim the US disputed. Around the same time, the first face-to-face negotiations since the deal, due to take place at a Swiss resort, were abruptly cancelled, with the US delegation pulling out citing unresolved issues around the talks.
The Strait of Hormuz matters so much because roughly a fifth of the world's seaborne oil passes through it. Even when a deal is on paper, getting traffic moving again is slow: the waterway is believed to still contain naval mines that will take weeks to clear, war-risk insurance remains elevated, and tanker owners have signalled they will move cautiously until the rules of safe passage are clear. In other words, "reopened" on paper and "flowing normally" in practice are not the same thing.
How oil has moved — and why it matters at the pump
| Date | Brent crude (approx.) | What was happening |
|---|---|---|
| Mid-March 2026 (peak) | ~$120+ | Strait shut, war at its height |
| 17 June 2026 | ~$78 (3-month low) | Framework deal announced |
| 19–20 June 2026 | back above $80 | Talks cancelled, Strait re-closed |
| This week | hovering around $80 | Recovery in doubt, mixed signals |
The pump maths: Crude is the single biggest ingredient in the price of petrol and diesel. As a rough rule, motoring groups reckon every $10 move in the oil price feeds through to around 7p a litre at the pump — but with a lag of a week or two. The good news is that the recent rebound is small so far. The bad news is that it has stopped the clear downward momentum the forecasts were built on.
So will pump prices still fall?
The honest answer is that the easy part of the fall has probably already happened. The latest official figures, for the week of 22 June, show petrol down again to 153.3p and diesel to 172.5p — falls of 2.3p and 4.2p on the week. But that reflects the cheaper oil retailers bought earlier in June, before this week's reversal, not what's happened since. There's still a little of that cheaper wholesale fuel working its way through, so some further easing in the very short term is likely regardless of the wobble.
But the further, faster falls that were forecast depended on oil continuing to slide toward and below $78—$79. With crude now back above $80 and the deal in question, that path is no longer clear. If the agreement holds and the Strait genuinely reopens, the RAC's sub-150p petrol is still on the table later in the summer. If talks break down properly, the recent falls could stall or even reverse.
Worth remembering: Retailers are usually quick to raise prices and slow to cut them — the so-called "rocket and feathers" effect. That means even genuine wholesale falls reach the forecourt with a delay, while any fresh rise tends to land faster. Headlines about the oil price are a guide to direction, not a promise about what your local station will charge tomorrow.
What this means for you
For drivers, the practical takeaway hasn't changed, but it matters more when the direction is uncertain. National averages tell you the trend; they don't fill your tank. When prices are moving unevenly, the gap between the cheapest and dearest forecourt in the same town widens — some sites cut quickly to win custom while others hold firm. That gap, often 10–20p a litre, is the saving you can actually control, whatever oil does next. We explain why prices differ across the same town.
It's also worth keeping the tax picture in mind. Fuel duty is unchanged at 52.95p a litre, and VAT is still 20%, so a large slice of what you pay isn't moving with oil at all — and that duty discount is currently set to start unwinding later in the year. We've covered the revised timetable in our report on the September fuel duty changes, and you can see how the tax stacks up in terms of how much fuel is taxed in the UK.
The practical move right now: Don't try to time the market on a tank of fuel. Lock in today's lowest local price rather than waiting for a national fall that may or may not arrive — and if you're a diesel driver, watch the gap to petrol, which has been narrowing fast. A couple of minutes comparing forecourts near you beats guessing where oil goes next.