Oil prices fell below $100 a barrel early today and stocks markets saw significant gains amid rising optimism that an end to the war in Iran is in the offing.
Some petrol stations ran out of unleaded petrol yesterday and an energy boss urged the UK government to open a key gasfield to ease supply concerns.
Brent crude oil price briefly hit $119 per barrel yesterday, close to its highest since the start of the US-Israel war with Iran which has effectively blocked the Strait of Hormuz, a key passage for tankers.
However, there have been indications from the US and Iran that they want the war to end soon.
Russ Mould, investment director at AJ Bell, said: “President Trump’s messaging that the war will be over in a couple of weeks and the clearest indication yet that Iran also wants to end the fighting are being seized on by investors.
“Eyes are likely to be glued to television screens later when Trump is set to address the American people.”
There were queues at some petrol stations as motorists tried to beat price increases. One Tesco petrol station in Edinburgh had no unleaded petrol available.
Petrol has hit 152.8p a litre, its highest in two years and about 20p more than the start of the war, according to the RAC motoring organisation.
The average diesel price rose to 182.77p, its highest level since December 2022 and 40p more than at the start of the war.
RAC’s head of policy Simon Williams said the price of petrol could stabilise “if the cost of oil doesn’t increase further, although diesel still looks likely to rise.”
Ironically, the price rises coincides with a cut in household energy bills which will be negated by higher prices for all oil-derived products, including plastics.
There have been calls for the UK government to reverse its ban on new oil and gas fields in the North Sea and for existing fields to increase production to reduce the reliance on imports.
Neil McCulloch, the chief executive of Adura, the joint venture between the oil giants Shell and Equinor, said that unlocking the Jackdaw gasfield, about 155 miles east of Aberdeen, would generate significant sums for the Treasury, making Britain less reliant on costly and more environmentally damaging foreign imports as soon as October.
Jackdaw and the Rosebank oilfield, which is also under the control of Adura, are on hold because of a successful court challenge by activists after their approval was found to have failed to meet environmental tests.
Jackdaw was approved in 2022, and Rosebank in 2023, with the former estimated to have the potential to produce 6.5% of Britain’s gas output.
Rosebank, the UK’s biggest undeveloped oil and gasfield, is believed to contain up to 300 million barrels of oil.
Conservative party leader Kemi Badenoch was in Aberdeen on Monday to launch a “get Britain drilling” campaign.
Opinion polls suggest that the public are broadly in favour of exploiting North Sea resources instead of relying on imports, though environmental campaigners argue this is incompatible with legally binding net-zero targets.
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