Drivers are being warned not to be fooled by a slight decrease in petrol prices, as the cost of fuel remains significantly above pre-war levels. The average price of petrol has fallen to 156.82p per litre, down from a high of 158.17p on April 13. However, this is still well above the 131.71p recorded before the conflict with Iran began.
Market Volatility Continues
The slight reprieve comes amid ongoing tensions between the US and Iran, with the Strait of Hormuz still not fully operational. US President Donald Trump announced a pause in the planned operation to guide stranded ships through the strait, stating it would last "for a short period of time" to allow for potential peace negotiations.
Despite the dip in pump prices, Brent Crude oil remains above $100 per barrel, far exceeding the pre-war level of $70. Experts caution that further significant reductions are unlikely.
Expert Warnings
Samuel Mather-Holgate, Managing Director of Mather and Murray Financial, commented: "Do not be fooled by a slight reprieve in fuel costs. With Captain Calamity in the White House, anything is possible. This conflict is nowhere near over, and the possibility of escalation is a probability. £2 per litre is not off the table, and motorists should buckle up for a bumpy ride."
Tony Redondo, Founder of Cosmos Currency Exchange, explained the apparent contradiction: "Petrol prices dipping while oil stays above $100 may seem contradictory, but it's a classic case of market lag. Pump prices reflect wholesale refined fuel costs and retailer margins rather than crude directly. The current dip suggests the risk premium is easing as traders price in a potential pause in the Strait of Hormuz blockade. However, a return to pre-war levels near 140p remains unlikely while Brent stays above $100. Should the conflict escalate or the blockade tighten, prices could surge toward 170p."
Global Implications
The Strait of Hormuz carries approximately 20% of global oil, meaning even with supply flowing, traders price in insurance against a sudden shutdown. Recent headlines about a pause offer only temporary relief, and the market remains on a knife-edge until a permanent diplomatic resolution is reached.
