Brent crude started 2026 at around $73 a barrel. It hit $120 within ten days of the war starting. It is currently trading above $104. Iran has threatened $200. The IEA has called this the largest disruption to global energy supplies in history. Your fuel bill is already proving them right.
When MotorBuzz first reported on the Iran war's impact on fuel prices at the start of March, Brent crude had surged 13 per cent to $82.37 in a single session and the Strait of Hormuz had effectively shut. Three weeks later the situation is considerably worse. Brent peaked at $120 on 9 March, settled back toward $100 briefly after the IEA announced its largest-ever emergency reserve release, then spiked above $106 again after Israel struck Iran's South Pars gas field on 18 March. As of 23 March it is trading at around $104.
The IRGC's position is unambiguous. Their spokesperson stated this week:
"You will not be able to artificially lower the price of oil. Expect oil at $200 per barrel. The price of oil depends on regional security, and you are the main source of insecurity in the region."
That figure is a threat, not a forecast. Whether it materialises depends entirely on how long the Strait stays closed and whether any of the infrastructure damage to Gulf production facilities proves permanent. But $200 is no longer a number analysts are laughing at.
What is happening at the pump right now
In the UK, petrol started the war at 132.83 pence per litre. As of 18 March it was 142.62p, a 7.4 per cent increase in less than three weeks. Diesel has moved harder: from 142.83p to 162.66p, a rise of 20.3 per cent in the same period. That is a fill-up cost increase of roughly £10 for an average family car on petrol and £16 on diesel. The RAC's current projection is that petrol is heading to 150p per litre if oil holds at $100, with diesel approaching 180p. The UK's pre-conflict peak was 191p per litre during the Russia-Ukraine crisis in 2022. We are not there yet. The trajectory suggests we are heading in that direction.
A petrol station in Chelsea was charging 238.7p for petrol and 264.9p for diesel in early March. That is an extreme outlier, but it is documented.
Chancellor Rachel Reeves, who had planned to increase fuel duty by 1p in September 2026, has told the House of Commons the government will keep the situation under review. Energy Secretary Ed Miliband has accused fuel retailers of price gouging. The Petrol Retailers Association temporarily abandoned talks with the government after calling the language inflammatory and noting that government taxes still comprise around 57 per cent of the cost of petrol, while retailer margins rarely exceed 6 per cent.
In the United States the picture is similarly sharp. US petrol averaged $2.98 per gallon before the war. It is currently averaging $3.72 per gallon according to AAA, an increase of 74 cents in three weeks. Diesel has crossed $5 per gallon for the first time since December 2022. US diesel is the lifeblood of the American logistics chain: every truck, train, barge and construction machine in the country runs on it. A 34 per cent diesel increase in three weeks is not a fuel story. It is an inflation story.
Why your fuel costs track global markets even when your country produces its own oil
This is the question that baffles people, and rightly so. The United States is the world's largest oil producer. It pumps around 13 million barrels per day. Britain produces North Sea crude. So why do domestic consumers pay market prices driven by events in the Persian Gulf that have nothing to do with the oil under their own ground?
The answer is that oil is a globally fungible commodity traded on international futures markets. When a barrel of Brent crude trades at $104, that price reflects global supply and global demand simultaneously. A domestic oil producer in Texas or the North Sea can sell their barrel on the open market to whoever pays the most, anywhere in the world. They are not obligated to supply their domestic government at a discount. Their barrel is worth $104 today because that is what the global market will pay for it. If they sold it domestically at $73 last month's price, they would be giving money away.
The US Strategic Petroleum Reserve exists precisely to create a partial buffer against this mechanism. President Biden used it extensively in 2022. The Biden administration has now announced a release of 172 million barrels from the SPR over 120 days, joining a coordinated IEA release of 400 million barrels from reserves across 32 member countries. Goldman Sachs estimates those releases can offset roughly 20 days of a full Strait of Hormuz blockade. The Strait has been effectively closed for 24 days.
The reserves slow the price rise. They do not stop it. And they are finite: the SPR currently holds approximately 395 million barrels. The US has been drawing it down since 2022 and has not fully restocked.
The tipping points: how high before the economy breaks
Goldman Sachs Research has modelled the price impact scenarios with precision. A full one-month closure of the Strait with no offsets adds $15 per barrel. If all spare pipeline capacity is used (approximately 4 million barrels per day can bypass the Strait through alternative routes), the impact falls to $12. Add coordinated strategic reserve releases at 2 million barrels per day and it falls further to $10. We are currently living inside the worst-case scenario: the Strait has been closed more than three weeks, pipeline bypass capacity is being used, reserves are being released at scale, and the price is still $104.
The cascade that follows sustained high oil prices works through several stages, each slower than the last but more entrenched.
Stage one is fuel costs, which arrive within days. That is where the UK and US are now.
Stage two is logistics. Diesel powers every vehicle that moves goods from manufacturer to warehouse to shop. The US has seen trucking companies add fuel surcharges to every shipment. The EU weighted average diesel price is now above EUR 2 per litre, up 20 per cent since 28 February. Every percentage point on diesel is a multiplier on the price of everything delivered by road, which is almost everything.
Stage three is food. Fertilisers are derived from natural gas. Farm machinery runs on diesel. Refrigerated distribution runs on diesel. Food prices are the last domino to fall but the hardest to reverse once they start rising. The UK's Food Policy Institute has already warned of long-term food price increases. Pakistan has closed schools to conserve fuel. South Korea has capped pump prices for the first time in 30 years. France's TotalEnergies capped its own station prices through March. Sri Lanka reintroduced fuel rationing. These are not small economies making theatrical gestures. They are countries calculating that the social cost of unconstrained fuel inflation exceeds the cost of intervention.
Nobel Prize winning economist Philippe Aghion has stated directly that if Brent exceeds $150 for a sustained period, the world enters territory comparable to the 1973 oil crisis. During that crisis, a fourfold increase in oil prices within three months sent inflation across Western economies into double digits and triggered the deepest recession since the 1930s. The shock was partially resolved by emergency measures and eventually by a negotiated end to the Arab oil embargo. The current crisis has no equivalent diplomatic off-ramp visible. Iran has no incentive to reopen a waterway that gives it unprecedented leverage. The United States has no military route that reopens the Strait without Iranian cooperation. Trump has publicly urged countries to help escort shipping through but China, Japan, France and the UK had not publicly committed to deploying navies as of this week.
The IEA executive director Fatih Birol said at the 400 million barrel release announcement:
"This is a major action aiming to alleviate the immediate impacts of the disruption in markets. But to be clear, the most important thing for a return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz."
That is as direct as an international body gets. The reserves buy time. Only the politics ends this.
The broader economic exposure
The UK gets around 5 per cent of its oil directly from the Gulf. The US gets around 8 per cent. Those numbers suggest both countries have substantial insulation. They do, relative to Japan (70 per cent of oil imports through Hormuz), South Korea, China and India. But as the Goldman Sachs analysis makes clear, it does not matter whether your specific crude travels through the Strait. The global oil price is one price. When 20 per cent of global supply is disrupted, the price every buyer pays everywhere goes up. British drivers are not paying 20 per cent more for diesel because British oil comes from the Gulf. They are paying it because the global price of the commodity their fuel is derived from has risen 40 per cent in three weeks.
Dubai crude, the benchmark for Asian buyers, has hit an all-time high above $150. WTI, the US benchmark, is around $96. The spread between them is more than $50 for what is effectively the same commodity. That gap is evidence of how extreme the physical scarcity in Asia has become. Commodities analyst Rory Johnston noted this week that the longer Asia's shortage persists, the more it becomes everyone's problem as Asian refiners compete globally for barrels from further afield, driving the price up for all buyers.
The one structural observation that cuts across all of this is the one MotorBuzz has been making across its coverage of this conflict: oil price shocks do not just raise your fuel costs. They raise the cost of everything. And the people who paid least to start the conflict are invariably the ones paying most before it ends.
Sources: Al Jazeera, 16 March 2026 | Fortune, 18 March 2026 | NPR, 16 March 2026 | CNBC, 17 March 2026 | Fleet News / RAC, 19 March 2026 | CNBC UK Exchange, 18 March 2026 | IRU World Road Transport Organisation, 21 March 2026 | Goldman Sachs Research, March 2026 | Al Jazeera / IRGC statement, 11 March 2026 | Wikipedia / Economic impact of the 2026 Iran war | Bloomberg UK pump prices, 17 March 2026 | MotorBuzz initial Iran oil coverage
