Oil prices have soared to their highest level since 2022 as President Donald Trump appears to be preparing for an escalation of the Iran war.
The fee of benchmark Brent crude soared past £94 a barrel, up nearly 7%, reaching a high not seen since Russia’s invasion of Ukraine in 2022.
Hopes of a resolution to the war and the reopening of the crucial Strait of Hormuz shipping route have been dashed as peace talks between the US and Iran break down.
Trump has rejected Iran’s proposals to reopen the Strait of Hormuz and is preparing to launch a series of strikes on Iran, which might bring an end to a fragile ceasefire.
The surge in oil prices will result in further fears over price rises at petrol pumps, with worries that the worldwide energy shock will result in a pointy increase in UK inflation.
Could this result in a recession within the UK?
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In March, Larry Fink told the BBC that if the conflict isn’t settled, there might be ‘years’ of high prices and a ‘stark and steep recession’.
‘Rising energy prices are a really regressive tax. It affects the poor greater than the rich,’ he said.
Thomas Sampson, associate professor of Economics on the London School of Economics (LSE), told Metro that while it is feasible for a recession to occur, it can rely on the severity and duration of the oil shock.
Weeks of intensifying attacks within the Middle East, disruption to energy production, and shipping delays within the Strait of Hormuz are all prone to have significant impacts on the worldwide economy.
In early March, when oil surged in price, motorists were urged to stop ‘non-essential journeys’ to lower your expenses.
President of the AA, Edmund King, is urging Brits to make fewer journeys to lower your expenses, and suggested motorists should change their driving style to be more fuel efficient.
King said: ‘The longer this conflict goes on, the more effect it can have on the fee of oil. Any time Brent Crude passes 100 dollars per barrel raises concern across the markets, for the haulage industry and drivers.
‘There can be gradual increases in pump prices, but this shouldn’t occur overnight as fuel has been purchased at previous prices.’
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