The cost of petrol and diesel continues to climb, leaving motorists watching closely to see whether the ceasefire between the United States and Iran will eventually bring relief at fuel stations.
Although oil prices initially dropped following the announcement of a pause in hostilities, they rebounded on Thursday amid growing concerns about the stability of the agreement. Analysts say the price of oil remains significantly higher than levels seen before the conflict began, and drivers have been cautioned not to expect any sharp reductions in fuel costs in the immediate future.
Still, there is some cautious optimism. One motoring organisation has suggested that fuel prices could begin to ease within the next couple of weeks—provided the ceasefire holds and tensions do not escalate further.
Uncertainty surrounding the truce has intensified after Israel carried out a series of strikes on Lebanon, raising fresh doubts about the agreement’s durability. In response, Tehran warned of a “regret-inducing response” if such actions continue. Meanwhile, US President Donald Trump stated that American forces would remain deployed in the region until Iran adheres to what he described as the “real” ceasefire terms.
A central condition of the ceasefire was the safe passage of ships through the Strait of Hormuz, a vital artery for global oil and gas supplies. However, reports suggesting that Iran may keep the route closed in response to Israeli actions have reignited fears of prolonged disruption to energy flows, potentially sustaining high fuel prices.
Reflecting these concerns, Brent crude prices rose by more than 3.5% on Thursday, surpassing $98 per barrel, as pressure mounted on what US Vice President JD Vance described as a “fragile truce.” Since the conflict began on 28 February, wholesale oil prices have surged by around 35%.
As crude oil is a primary component in petrol and diesel production, fluctuations in its price directly impact the cost of fuel at the pump. Data from UK motoring group the RAC showed that average petrol prices reached 158.03p per litre on Thursday, while diesel climbed to 191.11p—both slightly higher than the previous day.
The financial impact on drivers has been significant. According to the RAC, filling a petrol tank now costs £13.86 more than it did at the start of the conflict, bringing the total to £86.92. Diesel users have been hit even harder, with a full tank costing £26.80 more at £105.11.
The RAC has warned that any meaningful drop in fuel prices is unlikely in the short term. However, the AA offered a more hopeful outlook, noting that wholesale fuel costs have already begun to decline compared to earlier in the week.
Luke Bosdet, the AA’s spokesperson on pump prices, explained that there is typically a delay of 10 to 14 days between changes in wholesale costs and adjustments at fuel stations. “Drivers should expect prices on forecourts to stabilise by next weekend and then begin to fall—provided the ceasefire remains intact,” he said.
Global stock markets have also shown signs of unease. After strong gains earlier in the week, markets pulled back, reflecting broader uncertainty. Japan’s Nikkei 225 index fell by 0.7%, while in Europe, the UK’s FTSE 100 slipped 0.3%. Germany’s DAX dropped 1.2%, and France’s CAC declined 0.6%. In the United States, the Dow edged down 0.2% in early trading, while the S&P 500 and Nasdaq remained largely unchanged.
Victoria Scholar, head of investment at Interactive Investor, noted that investor sentiment remains fragile. “There’s a degree of nervousness in global markets,” she said. “Recent gains are being pared back, largely due to uncertainty over whether the Strait of Hormuz is actually open.”
Shipping activity in the Gulf remains disrupted. Iran’s navy has reportedly warned that vessels attempting to pass through the strait without authorisation “will be targeted and destroyed,” according to shipping brokerage SSY. At the same time, Iran’s deputy foreign minister, Saeed Khatibzadeh, told the BBC that the country would ensure safe passage—but only after what he described as US aggression comes to an end, apparently referring to Israel’s actions in Lebanon.
Confusion persists over whether Lebanon is covered under the ceasefire terms, further complicating the situation.
Vice President JD Vance is expected to participate in negotiations with Iran in Pakistan on Saturday, in an effort to stabilise the agreement.
For now, shipping through the Strait of Hormuz remains far below normal levels. Only a small number of vessels have passed through since the ceasefire announcement, compared to around 130 ships per day before the conflict. Maritime tracking firm Pole Star Global estimates it will take at least 10 days to clear the current backlog, even if operations return to normal.
Maritime intelligence company Windward added that shipping conditions have not significantly improved since the ceasefire was declared. Even under the most optimistic scenario, it could take weeks to move stranded oil and gas cargoes, and months for global trade to return to pre-crisis levels.
In the meantime, several countries—including Malaysia, India, and the Philippines—have negotiated safe passage for their vessels.
Nils Haupt of shipping company Hapag-Lloyd highlighted the ongoing uncertainty, saying it remains “very difficult to plan” due to constantly changing developments. He added that the company is still awaiting clarity on whether new fees will be imposed for using the Strait of Hormuz.
“If ships are forced to pay fees worth millions—double or even triple the cost of crossing the Panama Canal or the Suez Canal—it would be completely unreasonable for the entire industry,” he warned.
