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What Iran war could mean for Brits – surging petrol prices and mortgage costs to energy bills doubling
The mayhem in the Middle East caused by the tit for tat strikes between the US, Israel and Iran has already had a knock-on effect on the world economy, so here is how the conflict could affect you
The last thing Brits need is more financial pain after the pandemic-fuelled cost of living crisis pushed the UK economy to the brink. But the war in the Middle East is threatening to do exactly that.
The joint strikes on Iran by the US and Israel which saw the Middle Eastern country's leader, Ayatollah Ali Khamenei, killed and the subsequent retaliatory strikes by Iran on a number of their neighbouring oil-rich Gulf states has already seen a knock-on effect on the world economy and especially the oil and gas prices.
From mortgages to bills to trips abroad, here is exactly how the conflict could affect you over the coming weeks and months.
Energy Bills
Brits are becoming more and more familiar with eye-watering rises in their energy bills, and unfortunately the situation in the Middle East will likely see even greater rises than we've seen before.
The region is one of the largest producers of liquified natural gas, which provides a large portion of our total energy. Disruptions caused by the conflict will make production of liquified natural or seaborne gas much harder, as well as put pressure on its transportation.
All of these things will likely lead to price increases.
The biggest risk relates to a body of water called the Strait of Hormuz, which allows tanker to transport oil to Europe and beyond fairly easily. The Strait is located off the coast of Iran, meaning any ships sailing through it would be at serious risk of attack.
Instead, shipping companies would be forced to detour their ships around the entire continent of Africa, something which would be costly both in terms of time and money.
Analysts are estimating that a closure of the Strait of Hormuz would see the UK energy bill cap increase from just over £1,.600 to a whopping £2,500 because of a tripling in wholesale prices, according to a report by The Times.
The Strait would need to be shut for just 6 weeks for this sort of rise, they added, with any further disruption having an even more devastating effect.
Fuel
Not only is the Strait of Hormuz a vital passage for the transportation of gas, it is also viewed as one of the world's primary 'oil highways', with around 20% of the stuff passing through it every year.
In 2025, that equated to over 20 million barrels of oil worth more than £450bn, according to a report from the US Energy Information Administration.
Any disruption would therefore see fuel prices massively increase, with the price of brent crude oil already surging 13% since the start of the conflict, jumping to around £82 a barrel.
This rise caused some desperate drivers to head to the pumps to stock up, meaning queues were seen at a number of petrol stations around the UK.
While that price is falling slightly now, any further disruption could see prices at the pump go up once again.
Several news outlets are reporting that prices are forecast to break the £100 barrier, which would push UK petrol from around £1.40 per litre to around £1.55, and diesel above to £1.62 per litre.
This translates to an average trip to the pump setting you back in excess of £90.
Your Mortgage
With oil and gas prices increasing, the costs of nearly everything, from delivery services to supermarket shops, will see a knock-on effect, leading to inflation across the board.
The Bank of England have been clear in their ambition to lower inflation from 3% to 2%, so any increase will likely see action on their behalf.
The most likely response would be not cut or even raise interest rates, meaning mortgage rates will increase too.
While those with fixed rate mortgages are likely to be fine, at least until their deal runs out, those on a tracker or variable mortgage will likely see their payments increase.
Those most likely to feel the burn will be first time buyers however, who could see the amount they can borrow go down and more money needed per month to pay it back.
Investments
Conflicts like the situation in the Middle East are always likely to rock the markets, with the FTSE 100 experiencing a slight fall already.
On the other hand, some shares viewed as being unaffected by the conflict, like gold, as well as those that are seen to potentially benefit from the war, such as defence companies, have seen increases in their price as investors seek to profit from the instability.
Experts are warning people with hedge funds or ISAs not to panic however, as a well-balanced grouping of investments shouldn't see too much disruption.
Travel
This new conflict in the Middle East has already caused massive travel disruption, but the knock-on effects on things like fuel prices could see Brits travelling abroad face further issues.
With oil prices going up, the cost of airplane fuel is likely to go up with it, and the increase cost will no doubt be passed onto the passengers.
Furthermore, with the airspace over Iran and parts of the wider region likely to remain closed, flight-paths will become harder to map, given the strain placed on airlines by the war in Ukraine already.
Daily Star Sunday
The mayhem in the Middle East caused by the tit for tat strikes between the US, Israel and Iran has already had a knock-on effect on the world economy, so here is how the conflict could affect you
The last thing Brits need is more financial pain after the pandemic-fuelled cost of living crisis pushed the UK economy to the brink. But the war in the Middle East is threatening to do exactly that.
The joint strikes on Iran by the US and Israel which saw the Middle Eastern country's leader, Ayatollah Ali Khamenei, killed and the subsequent retaliatory strikes by Iran on a number of their neighbouring oil-rich Gulf states has already seen a knock-on effect on the world economy and especially the oil and gas prices.
From mortgages to bills to trips abroad, here is exactly how the conflict could affect you over the coming weeks and months.
Energy Bills
Brits are becoming more and more familiar with eye-watering rises in their energy bills, and unfortunately the situation in the Middle East will likely see even greater rises than we've seen before.
The region is one of the largest producers of liquified natural gas, which provides a large portion of our total energy. Disruptions caused by the conflict will make production of liquified natural or seaborne gas much harder, as well as put pressure on its transportation.
All of these things will likely lead to price increases.
The biggest risk relates to a body of water called the Strait of Hormuz, which allows tanker to transport oil to Europe and beyond fairly easily. The Strait is located off the coast of Iran, meaning any ships sailing through it would be at serious risk of attack.
Instead, shipping companies would be forced to detour their ships around the entire continent of Africa, something which would be costly both in terms of time and money.
Analysts are estimating that a closure of the Strait of Hormuz would see the UK energy bill cap increase from just over £1,.600 to a whopping £2,500 because of a tripling in wholesale prices, according to a report by The Times.
The Strait would need to be shut for just 6 weeks for this sort of rise, they added, with any further disruption having an even more devastating effect.
Fuel
Not only is the Strait of Hormuz a vital passage for the transportation of gas, it is also viewed as one of the world's primary 'oil highways', with around 20% of the stuff passing through it every year.
In 2025, that equated to over 20 million barrels of oil worth more than £450bn, according to a report from the US Energy Information Administration.
Any disruption would therefore see fuel prices massively increase, with the price of brent crude oil already surging 13% since the start of the conflict, jumping to around £82 a barrel.
This rise caused some desperate drivers to head to the pumps to stock up, meaning queues were seen at a number of petrol stations around the UK.
While that price is falling slightly now, any further disruption could see prices at the pump go up once again.
Several news outlets are reporting that prices are forecast to break the £100 barrier, which would push UK petrol from around £1.40 per litre to around £1.55, and diesel above to £1.62 per litre.
This translates to an average trip to the pump setting you back in excess of £90.
Your Mortgage
With oil and gas prices increasing, the costs of nearly everything, from delivery services to supermarket shops, will see a knock-on effect, leading to inflation across the board.
The Bank of England have been clear in their ambition to lower inflation from 3% to 2%, so any increase will likely see action on their behalf.
The most likely response would be not cut or even raise interest rates, meaning mortgage rates will increase too.
While those with fixed rate mortgages are likely to be fine, at least until their deal runs out, those on a tracker or variable mortgage will likely see their payments increase.
Those most likely to feel the burn will be first time buyers however, who could see the amount they can borrow go down and more money needed per month to pay it back.
Investments
Conflicts like the situation in the Middle East are always likely to rock the markets, with the FTSE 100 experiencing a slight fall already.
On the other hand, some shares viewed as being unaffected by the conflict, like gold, as well as those that are seen to potentially benefit from the war, such as defence companies, have seen increases in their price as investors seek to profit from the instability.
Experts are warning people with hedge funds or ISAs not to panic however, as a well-balanced grouping of investments shouldn't see too much disruption.
Travel
This new conflict in the Middle East has already caused massive travel disruption, but the knock-on effects on things like fuel prices could see Brits travelling abroad face further issues.
With oil prices going up, the cost of airplane fuel is likely to go up with it, and the increase cost will no doubt be passed onto the passengers.
Furthermore, with the airspace over Iran and parts of the wider region likely to remain closed, flight-paths will become harder to map, given the strain placed on airlines by the war in Ukraine already.
Daily Star Sunday