Oil prices have fallen back to levels not seen since before the Iran war, giving hard-pressed UK businesses access to cheap fuel as traffic on the vital Strait of Hormuz shipping lane slowly resumes.
Brent crude, the global benchmark, dipped briefly below $72.48 (£55) a barrel, the level it held the day before the United States and Israel launched their attack on Iran on February 28, before retreating to $73.23.
Energy markets have endured months of grief since Tehran retaliated by closing the Strait, a waterway that carries much of the oil and gas offshore. For trucking, hospitality and agricultural companies that have been watching their fuel balloon since spring, a messy pullback won’t come soon enough. Many small operators have used the conflict to try to get costs they can’t pass on, pressure Business Matters has followed among freight forwarders, hotels and farms that have been pushed into survival mode.
Crude has been falling slightly since June 17, when Washington and Tehran signed a Cooperation Agreement that set a 60-day window for talks on Iran’s nuclear program and other measures aimed at ending the conflict. Representatives of the two sides met in Switzerland last weekend, talks that led to the United States lifting sanctions on Iran’s oil exports.
The number of ships crossing the Strait of Hormuz has increased significantly since the agreement was signed, according to maritime intelligence firm Kpler. Its latest figures suggest 284 ships have made the journey since June 18, the day after the agreement was signed, although that remains below the pre-conflict average of about 138 crossings per day. Ships passing through in recent days have included those carrying crude oil, liquefied natural gas, fertilizer and other goods, Kpler told the BBC.
The United States and Iran have also established a “line of communication” to prevent disagreements “for the purpose of safe passage of commercial vessels through the Strait of Hormuz”, said mediators Qatar and Pakistan in a joint statement on Monday.
Dimitris Maniatis, chief executive of maritime risk consultancy Marisks, which deals with stranded ships in the region, described “a big change”, with more ships using the road in recent days. A limited number of ships can cross the northern channel with the permission of Iranian authorities, he said, while the US navy has opened a southern channel that has been cleared of mines and other obstacles placed during the war. However, traffic remains below pre-war levels, with more than 100 ships a day using the route.
For drivers and companies that use vans and trucks, attention has now turned to how quickly the drop in pollution is entering the field.
“After the lowest oil prices since before the Iran war started, motorists should see the price of petrol fall below 150p. [a litre] in the next week or so,” said Simon Williams, head of policy at the RAC.” He added that diesel “should be back under 160p.” Petrol rose to 159.53pa a liter on 28 May, according to the motoring group, while diesel fell from 191.54p on 15 April. Motorists can track RAC data daily. the trend is set in a House of Commons Library forum on petrol and diesel prices.
In the United States, the price of regular gasoline fell to about $3.93 a liter after touching $4 in April, the highest price since 2022, although it remains above pre-war levels.
The pace of that fall has become political. President Donald Trump on Wednesday ordered an investigation into the big energy companies, accusing Shell, ExxonMobil and others of “beating” drivers by failing to lower pump prices as costs plummeted. “Oil prices are down a lot and we’re not seeing anything on the pump compared to where it should be,” Trump told reporters in the Oval Office. The American Petroleum Institute, which represents the US oil and gas industry, argued that fuel prices “are not going to cover crude oil”.
British energy firms have faced similar allegations of unfair fuel price hikes since the start of the war. Last month, however, the UK’s competition watchdog said it had found no widespread evidence of profit-making, noting that average rates were “not significantly different” between February and March.
For now, the move provides some measure of comfort for millions of small firms where fuel is an inevitable line on the balance sheet, and relief is long overdue. Whether the austerity endures will depend on whether the fragile peace holds, and whether the broader pressures of higher energy costs forced on UK business continue to bite.
