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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:
Fuel Market Update – What’s Happening at the Pump?
Crude oil prices went up for the third week in a row, mainly due to growing conflict in the Middle East. Brent crude oil prices hit a peak on June 19 before dipping slightly. These rising oil prices can eventually trickle down to higher fuel prices at the pump, especially if the trend continues.
Oil prices climb as Middle East tensions rise
Tensions between Israel and Iran flared up after Israeli airstrikes on June 13, leading to missile exchanges between the two countries. Several of these attacks targeted energy sites, raising fears about potential damage to oil facilities. While no major supply disruptions have happened yet, there’s concern about the Strait of Hormuz – a narrow waterway that handles about one-third of all oil shipped by sea. If anything were to block or slow traffic through that area, it could quickly lead to supply issues, which would drive up fuel prices around the world.
President Trump has called for Iran’s unconditional surrender and says the U.S. may join the strikes. The White House has given itself two weeks to make that decision, depending on whether peace talks go anywhere. Meanwhile, leaders in the UK and EU are urging all sides to find a diplomatic solution. If the situation worsens, oil prices – and fuel prices – could rise even more. Any progress toward peace might help ease prices.
Supply remains stable – for now
Despite all this, groups like the International Energy Agency and OPEC say there’s no immediate oil shortage. In fact, global supply is still solid. But the fear of possible disruptions, especially at the Strait of Hormuz. is enough to keep prices on edge. Even if there’s plenty of oil available, fear and uncertainty can still push prices higher – something drivers might start noticing at the pump in the coming weeks.
Looking Ahead – oil prices next week
Looking ahead, we expect oil prices to keep climbing in the short term. The outlook remains unpredictable. A serious escalation in the Middle East could mean more expensive fuel, while a quick diplomatic breakthrough could bring some relief. Either way, the situation is one to watch if you’re keeping an eye on fuel prices.
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.