The price of diesel in the UK has hit an all-time high, as the fallout from the US-Israel war with Iran continues to drive up costs.

The average price of a litre of diesel at the pump stands at 199.18p, according to the RAC motoring body. The previous record was 199.09p, recorded on 25 June 2022, following Russia's full-scale invasion of Ukraine earlier that year.

Over the past seven months, the Iran war has severely disrupted the production and transportation of wholesale oil across the region, causing the price of fuels made from crude to surge.

Motor fuel prices fell back when the US and Iran agreed in June to a framework deal to end the fighting, but rose again as tensions resurfaced.

Meanwhile, US President Donald Trump has responded to rising prices by mulling a ban on US diesel producers selling overseas - a move which could push UK prices even higher.

Crude oil is a key ingredient in petrol and diesel, which means that higher wholesale costs make filling up a car more expensive. The price of petrol and diesel is also heavily influenced by demand and refining capacity.

Analysts say every $10 (£7.44) per barrel increase in the oil price pushes up pump prices by roughly 7p a litre.

Since the war began, the price of a barrel of Brent crude – the global benchmark for wholesale oil prices – has been very volatile.

Generally speaking, news of further conflict drives the price up while hopes of an end to the war pushes the price down.

Additionally, Russia has implemented an export ban on diesel, following attacks on its refineries by Ukraine, further limiting supply.

Before the Middle East conflict, Brent was trading just over $70 a barrel but the fighting saw it peak at above $120.

In early July, after the framework deal was signed, prices fell back to near the $70 mark.

The price climbed back up again after peace talks collapsed and it is now above $100 a barrel.

Before the war began, the average price of petrol was 132.83p per litre and diesel was 142.38p.

Meanwhile, petrol has hit an average 174.13p a litre, which is the highest in more than four years but lower than its peak of 191.5p during the summer of 2022.

Simon Williams, head of policy at the RAC, said prices at the pumps will not come down until there is a "sustained lower oil price - over several weeks, not days".

Because transporting oil is a slow process, price movements in wholesale oil markets take about a fortnight to show at the pump.

Fuel retailers have denied accusations of price gouging during the conflict. The official markets regulator said it had "not seen evidence of retailers actively changing their pricing strategies to take advantage of the crisis".

A government scheme called Fuel Finder, external lets drivers compare the cost of fuel offered by petrol stations across the UK.

In May, the then Prime Minister Sir Keir Starmer said a planned 5p increase in fuel duty due in September would be postponed until the end of December because of the conflict.

Williams said that the UK government has "limited leverage when it comes to ending the US/Iran war" but lowering fuel duty further or reducing VAT could "ease the burden" at home.

The Middle East conflict sent global oil prices soaring as it effectively closed the Strait of Hormuz — one of the world's key water transport routes for oil, liquid natural gas and other essential commodities — limiting global supplies.

About 20% of the world's oil and liquefied natural gas normally passes through the waterway.

Even if a deal is agreed to reopen the strait, experts warn it will take time before normal levels of shipping through the Strait of Hormuz resume, and the impact of the war will continue to affect the global economy for potentially months to come.

No evidence of widespread fuel price-gouging, watchdog says

Drivers can compare fuel prices at different petrol stations - how does it work?

While Trump has suggested he might ban US producers from selling diesel overseas, he has not done it yet and views differ on how serious this threat is.

If it does happen, many agree it would hurt the countries which heavily depend on US diesel, such as the UK and several European countries.

Others note that, while the ban would be likely to reduce US diesel prices in the short-term, it could have unintended effects that could hurt US production – and put pressure on US diesel prices – in the long-term.

Why and how is US blockading Iranian ports in Strait of Hormuz?

Oil price predicted to remain above $100 for rest of year

The UK is heavily reliant on oil and gas imports, with the majority coming from the US and Norway.

The price of oil on the global market determines how much the UK pays for it.

Although the UK does get some oil from the North Sea, most of that is exported for refining elsewhere.

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Reporting by Faarea Masud, Jemma Crew, Alex Daniel, Michael Race, Mitchell Labiak, Emer Moreau and Miguel Roca-Terry

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