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We share our insights into the factors impacting fuel prices, including predictions for fuel costs as we head into next week.
What determines fuel prices?
Wholesale fuel prices determine the price of petrol and diesel at the pump. They are influenced by a range of factors, including crude oil supply, demand, and pricing, oil refinery production levels, the pound-to-dollar exchange rate, socio-economic and political factors that might impact production/demand, the margin (profit) taken by fuel retailers, and fuel duty and VAT charged by the Government.
Fuel prices this week:
Prices have risen this week. Factors influencing pricing include easing tensions between the US and China, US-Iran nuclear talks and OPEC+ supplies.
US-China and the impact of the global economy
Early this week, the United States and China announced a 90-day pause on tariffs. The ongoing threat of a trade war between the world’s two biggest economies – and biggest oil consumers – has caused concerns of an trade war, which would have impacted the global economy and oil demand. This pause has temporarily relieved global markets, easing fears of an imminent economic slowdown, leading to a modest rebound in oil prices. However, uncertainty remains high, and any signs of renewed friction could quickly cause oil prices to fall again.
How the US-Iran nuclear deal influences fuel prices
Donald Trump said on Thursday that the United States was getting close to securing a nuclear deal with Iran. If sanctions on Iran are lifted as part of a nuclear deal, Iran could boost its oil exports by around 400,000 barrels per day. This increase in global supply could impact the fuel price at the pumps – when supply increases and demand stays the same, oil prices tend to fall, and prices at the pump often follow. However, this could be offset by other factors.
OPEC+ production hikes impact prices on the forecourt
This week, OPEC+ – which includes key oil producers like Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman – agreed to increase their collective output by 411,000 barrels per day (bpd) in June 2025. This decision marks the second consecutive month of such increases, following a similar rise in May. When OPEC+ increases oil production, it adds more oil to the global market. If demand remains stable, this additional supply can lead to cheaper or more stable fuel prices at the pump.
General factors that influence oil and fuel pricing:
- While geopolitical tensions can cause market uncertainty – especially in oil-producing regions such as the Middle East and Russia – global economic performance can slow demand and impact prices.
- Oil is traded in U.S. dollars, so dollar fluctuations impact oil prices. A stronger dollar and fluctuations in exchange rates make oil more expensive in other countries, potentially lowering demand.
- Seasonal factors like winter heating and summer cooling demand can also increase oil consumption and pricing.
Please speak to our team for more information on fuel card pricing, including advice on how to save time and money on fuel management.
The information provided in this post is for information only. It does not constitute financial advice. Pricing predictions are speculative and should not be relied upon for forecasting.