Global fuel prices surge as Iran conflict disrupts oil markets

Thursday 02 April 2026 - 17:50

By: Dakir Madiha

Global fuel prices surge as Iran conflict disrupts oil markets

Fuel prices have climbed to multi-year highs worldwide after one month of conflict involving Iran disrupted global energy flows and tightened supply. The shock has hit consumers across major economies and forced governments to deploy emergency measures to contain economic fallout.

In the United Kingdom, average petrol prices reached 148.8 pence per litre on March 30, the highest level since May 2024. Diesel rose to 176.5 pence, its highest since December 2022. Data from the RAC Foundation show UK drivers have spent an additional £544 million on fuel since the conflict began on February 28. Some stations in London charged more than 200 pence per litre, while panic buying led to shortages in several regions.

In India, private fuel retailers began passing on higher costs that state-owned firms had previously absorbed. Shell India raised petrol prices by about 7.4 rupees per litre and diesel by 25 rupees in Bengaluru starting April 1. Nayara Energy had already increased prices days earlier. The Indian government responded by cutting special excise duties on petrol and diesel by 10 rupees per litre and introducing export taxes on diesel and kerosene to secure domestic supply. Economists estimate the annual fiscal cost of these measures at around 1.55 trillion rupees.

The disruption centers on the Strait of Hormuz, a critical shipping route that handles roughly one fifth of global oil flows. Intermittent closures and attacks on commercial tankers have pushed Brent crude to around $115 per barrel, up from about $70 before the conflict. In the United States, average gasoline prices exceeded $4 per gallon for the first time since 2022, while diesel reached $5.45, according to Time. The International Energy Agency described the situation as the largest supply disruption in modern oil market history.

European natural gas markets have also reacted sharply. The Dutch TTF benchmark rose by about 89 percent within a month, climbing from €31.5 to around €54.5 per megawatt hour. Missile strikes targeting a major liquefied natural gas export facility intensified supply concerns, according to Bloomberg.

Governments have moved quickly to stabilize markets. Russia imposed a ban on gasoline exports from April 1 through July 31 to contain domestic prices. Members of the International Energy Agency announced a coordinated release of 400 million barrels from strategic reserves to ease supply pressure.

Rising energy costs risk reigniting global inflation. Analysts warn that a 10 percent increase in diesel prices could lift the US consumer price index by 0.1 percent. In the United Kingdom, household energy bills could rise by up to 19 percent when the next price cap takes effect in July.