British drivers prepare for sharp increases in fuel costs and renewed inflation pressures as tensions escalate between the US and Iran. Brent crude oil recently climbed above $71 per barrel—the highest since July 2025—following Iran’s blockade of the Strait of Hormuz, which handles 20% of the world’s oil supply.
Potential Price Shock from US Military Action
Analysts warn that a US strike could drive oil prices toward $110 per barrel. This surge would reverse recent declines in UK petrol prices and jeopardize the current 3% inflation rate. President Donald Trump, seeking a new nuclear agreement, deploys a second aircraft carrier to the region while evaluating strike options with advisors.
Indications point to a possible attack as early as Saturday, though some experts anticipate a delay until after the Winter Olympics closing ceremony on Sunday to sidestep overshadowing the Milan event. Last summer, US forces targeted three Iranian nuclear facilities during a 12-day conflict initiated by Israel.
Stalled Diplomacy and Escalating Risks
Negotiations in Oman and Geneva stall amid fragile Swiss talks. Middle Eastern countries brace for widespread instability if discussions fail. Trump demands zero uranium enrichment, while Iranian President Masoud Pezeshkian asserts, “We are not seeking nuclear weapons… and are ready for any kind of verification.”
The International Atomic Energy Agency (IAEA) lacks access to key sites, and Iran enriches uranium to 60% purity—near weapons-grade levels, exceeding the 2015 deal’s 3.67% limit from which Trump withdrew in 2018. Iran’s stockpile surpasses 9,870kg, heightening Western concerns.
Tensions root in the 1979 Islamic Revolution, the US embassy hostage crisis, the Iran-Iraq War, and the Tanker War. Trump’s recent letter to Supreme Leader Ayatollah Ali Khamenei mirrors past outreach to North Korea but prompts vows of retaliation from Khamenei.
Expert Warnings on Economic Fallout
Tony Redondo, founder of Newquay-based Cosmos Currency Exchange, cautions: “Brent crude oil prices have already surged past $71 a barrel… and a more permanent disruption of traffic could push crude prices past $110 per barrel. This would immediately end the recent downtick in UK petrol prices, as retailers pass on costs to motorists. Beyond the pump, an energy price spike would reignite inflation, potentially forcing the Bank of England to maintain high interest rates. The ‘second-round effect’ means higher transport costs for food and goods, slowing global GDP growth.”
Redondo notes that while talks provide slim hope for de-escalation, military buildups signal a maximum pressure strategy that could destabilize global markets.
Riz Malik, director at Southend-on-Sea-based R3 Wealth, highlights: “Global instability often prompts a flight to safe assets, leading to a short-term sell-off of equities and a move into precious metals like gold, which often see increased demand. A conflict during Ramadan will amplify the political tensions with neighbouring countries.”
Rohit Parmar-Mistry, founder of Burton-on-Trent-based Pattrn Data, describes a strike as an “economic wrecking ball”: “The immediate casualty? The desperately-needed downtick in UK petrol prices. Any prolonged campaign in the Gulf will send crude soaring, and that pain hits the pumps instantly. But it doesn’t stop at petrol. Spiking energy costs will ripple through the supply chain, reigniting the inflation that ordinary people are already struggling to survive.”
David Belle, founder and trader at Fink Money, links timing to the Olympics: “There is an interesting correlation with the Winter Olympics and conflict… I think we will see a strike just after the closing ceremony or in the days following it.”
Amid ongoing protests in Iran over economic woes—with thousands killed in crackdowns—a US action risks broader conflict, soaring gold prices, and stalled global growth. The UK, with inflation easing to 3% from 3.4%, faces severe challenges to households and businesses from potential fuel price spikes.
