UK Fuel Prices: Pump Prices Set to Climb Again as Iran Ceasefire Falters

The picture for UK pump prices changed dramatically over the weekend of 10-11 May. After several weeks of cautious, gradual relief — with petrol easing slightly from its mid-April peak — three events combined to put oil markets back in retreat-from-relief mode.

On Monday 11 May, President Trump told reporters in the Oval Office that the ceasefire with Iran was "unbelievably weak" and on "massive life support". He rejected Iran's latest peace counter-offer with one word: "garbage". By Tuesday, Brent crude had jumped 3.4% to close at $107.77 a barrel — its third straight session of gains. By Wednesday morning, prices were holding above $107 with little sign of easing.

For UK drivers, this matters because pump prices are downstream of crude. When Brent moves sharply in one direction for several days, that movement reliably feeds through to forecourts within a fortnight. The question is no longer whether pump prices will rise again — it's by how much, and how fast.

What just happened, in a week

To understand where prices are likely to go next, it helps to track the last seven days of escalation. Each event independently shifted the oil market upward.

The combined effect is that markets have priced in a longer disruption than they were a week ago. Just before the latest collapse in talks, Citi analysts had been working on an assumption that the Strait of Hormuz might reopen around end-May. That timeline now looks optimistic. Citi itself wrote that risks remained "tilted to the upside" — meaning the more likely surprise is higher prices, not lower.

The Aramco warning that worried the market most

The single most significant new piece of information last week didn't come from Washington or Tehran. It came from Saudi Aramco — the largest oil producer in the world by a wide margin.

Aramco's chief executive Amin Nasser used a Milken Institute conference appearance to warn that the market is losing roughly 100 million barrels of supply each week while Hormuz remains restricted, and that prolonged disruptions could push any return to normal pricing into 2027.

For context, global oil consumption is around 700 million barrels a week. Aramco is therefore describing a sustained shortage of around 14% of global supply — far larger than anything that has hit the oil market in living memory outside the COVID demand collapse. The 1970s oil shocks were similar in scale. Aramco saying this matters because Aramco doesn't generally talk down its own market; if the company's own CEO is publicly warning of a shortfall this size, the bias inside the producer community is toward expecting more pain, not less.

Chevron's CEO Mike Wirth, speaking on the same panel, added that fuel shortages — not just price rises — were now a growing concern in some regions of the world. Goldman Sachs warned that "easily accessible buffers of refined products are being depleted rapidly", particularly diesel feedstocks and jet fuel.

What this means for UK pump prices over the next 2-4 weeks

The mechanism by which a global crude price hike becomes a UK pump price hike is well-understood. Crude prices feed into wholesale petrol and diesel prices within about a week. Wholesale prices then feed into forecourt prices over the following two to three weeks, with supermarkets typically moving fastest and independent forecourts more slowly.

The current UK averages — 157.8p for petrol and 187.7p for diesel — already reflect a Brent crude price that was lower than where it is today. The three-session jump from around $100 to $107 represents roughly a 7% rise in crude. That doesn't translate one-for-one into pump prices (because tax and retailer margin take a fixed share), but a sensible rule of thumb is that a sustained 7% rise in Brent translates into approximately 3-5p per litre at the pump over the following month, assuming the pound holds steady against the dollar.

Diesel drivers face the bigger hit — again

One pattern that has held throughout this crisis is that diesel has moved more sharply than petrol, both up and down. Since the conflict began on 28 February 2026, petrol has risen roughly 17p per litre. Diesel has risen around 32p per litre — nearly double the move. On a typical 55-litre fill, that's an extra £18 for petrol drivers and around £25 for diesel drivers, every time they fill up, compared to pre-war prices.

The reason is structural. The Strait of Hormuz disruption hits middle distillate supply harder than it hits crude generally — middle distillates are the family of refined products that includes diesel, heating oil, and jet fuel. Refiners in the Gulf region produce a disproportionate share of the world's diesel, and the products are harder to source from alternative regions than crude itself. Goldman Sachs specifically called out "petrochemical feedstocks such as naphtha and LPG, as well as jet fuel" as products where buffers are running thin.

For UK haulage, fleet operators, and the millions of motorists who drive diesel cars, this matters because the diesel-to-petrol price gap has widened to around 30p per litre. The historical average is closer to 5-7p. That gap is unlikely to close until Hormuz reopens fully, which on current trajectory is at least weeks away.

The August fuel duty cliff edge

One factor that is currently still cushioning UK pump prices — and which most drivers have not yet thought about — is the 5p per litre fuel duty cut, originally introduced in 2022 after Russia's invasion of Ukraine.

That 5p discount expires on 31 August 2026. From 1 September, duty rises by 1p per litre. A further 2p increase follows in December 2026, and another 2p in March 2027, returning the rate to 57.95p per litre. From April 2027, fuel duty also begins rising with inflation each year.

The Bank of England has already signalled that previously anticipated interest rate cuts now look unlikely, and that rate rises are now possible — a direct result of the inflation impact of higher energy prices. UK CPI inflation is now expected to sit between 3% and 3.5% through Q2 and Q3 2026, with the OECD forecasting it could breach 5% — the highest projected rate in Europe.

What drivers can do this week

The single most controllable variable in your fuel bill remains, as it has throughout this crisis, the difference between the cheapest and most expensive forecourt within reasonable distance of where you live. The CMA's most recent monitoring report confirmed that local price gaps are now wide enough to save drivers up to $9 per tank — and volatile crude markets typically widen that gap further, because some retailers re-price faster than others.

A few practical steps for the next two weeks specifically:

• Fill up sooner rather than later if you're running low. The wholesale price feed into pump prices typically takes one to three weeks. If your tank is below a quarter and you were planning to fill up this weekend anyway, doing it now is likely to cost less than waiting another week.
• Don't panic-buy. The UK is not running out of fuel. Strategic reserves and diverse supply chains mean physical supply is not at immediate risk. Topping up your normal tank is sensible; making special trips to fill jerry cans is not.
• Check supermarket prices before non-supermarket forecourts. In a rising market, supermarkets typically lag for a few days before they move. The gap between Asda/Tesco/Morrisons/Sainsbury's and the average independent forecourt tends to widen during a price rise.
• Pay attention to forecourts near major roads. Motorway service stations have always been the most expensive — typically 15-20p above local averages — and that gap tends to widen during volatile periods, not narrow.

What's worth watching over the next fortnight

Three things will determine whether the May-June pump price picture is mild or severe.

1. Whether peace talks restart with substance. A return to the negotiating table with a serious framework would push Brent back below $100 quickly. Stalled talks keep it above $105. Outright collapse and renewed military action could push it back toward $115-120.
2. Whether Hormuz traffic resumes meaningfully. Even with a ceasefire in name, commercial vessels have been transiting Hormuz at around 5% of pre-conflict levels. A meaningful return — say 50% or more — would ease pressure significantly. Continued near-shutdown keeps the squeeze on.
3. Whether the UK government signals any change to the August fuel duty cliff. There is no current indication of a delay or extension, but if Brent stays elevated through summer, political pressure to defer the increase will rise sharply. Watch the late-summer Treasury statement.