Pumped up

Fear of sharp hikes in fuel prices | Energy bills could feel more heat | Risk to inflation, economy & rates

- BY GRAHAM HISCOTT

THE Middle East conflict threatens to affect households in the UK through fuel prices, inflation and interest rates.

Oil prices surged by 13 per cent in early trading yesterday after shipping in the Strait of Hormuz was disrupted by Iranian attacks.

Brent crude jumped to $82 (£61) a barrel, the highest since January last year, before retreating.

An oil tanker, Skylight, under US sanctions, was among disrupted shipments after it was reportedly hit in counter attacks off Oman.

The Strait, between Iran and Oman, connects the Gulf to the Arabian Sea and carries about 20 per cent of the world's oil and gas.

Most shipments are destined for China and India, but the disruption has triggered global jitters.

WHAT IT COULD MEAN FOR PUMP PRICES

The group FairFuelUK said: "Even short-term, oil tanker route closures or increased shipping insurance risks could initially push Brent crude toward $80 to $90, with extended scenarios risking a 1970s-style energy shock and triple-digit prices.

"A sustained rise in Brent to $100 could add 10p to 20p per litre to petrol and diesel within weeks, based on historical patterns similar to surges in 2022 when oil hit $120 amid the Ukraine invasion. Brent crude spiking to $80 to $90 will add 5p to 10p per litre." Higher oil prices could also feed through to wholesale energy costs.