Oil prices experienced a decline this week as optimism grew regarding a potential US-Iran peace agreement that could lead to the reopening of the vital Strait of Hormuz. The agreement is expected to be signed by Tehran and Washington in the Swiss town of Burgenstock on Friday, although specific details remain undisclosed. President Donald Trump stated that Iran has committed to never pursuing nuclear weapons and that the Strait of Hormuz will promptly reopen without toll charges.
The price of Brent crude dropped below $80 per barrel on Tuesday, reflecting hopes for the resumption of operations along the critical maritime passage. During the Iran conflict, oil prices had surged above $120.
The RAC anticipates that the ongoing decline in oil prices will be beneficial for motorists who have been grappling with escalating petrol and diesel costs in recent months. Unleaded petrol is currently priced at an average of 155.45p per liter, down from its peak of 159.53p on May 28 during the Iran crisis. Diesel prices have also fallen, with the average now at 175.86p per liter, compared to the peak of 191.54p on April 15.
Simon Williams, the head of policy at RAC, suggested that drivers may see further reductions at the pumps in the upcoming weeks. He mentioned that if oil prices stabilize around $85, a level not seen since early March, petrol prices could potentially drop to 148p per liter from the current average of 156p. Similarly, diesel prices could fall below 160p from the current average of 177p.
Motorists are encouraged to utilize driving apps to compare fuel prices effectively. UK forecourts are now mandated to report price changes to a Fuel Finder database within 30 minutes of adjustment, allowing apps like Confused.com, DriveScore, Fuel Finder UK, Fuel Spy, MotorMouth, PetrolPrices.com, RAC Fuel Watch, and the AA to provide price comparison services to motorists.
Chancellor Rachel Reeves has emphasized the collective responsibility of petrol retailers to ensure affordable prices for drivers.