UK diesel prices hit record highs due to impact of Iran war

• Diesel prices have risen £31 per tank since the Iran conflict started, impacting motorists and increasing transport costs across industry and agriculture sectors
• The UK imports 55% of its diesel consumption, with nearly 40% of oil product imports being diesel and 31% coming from the US, making it vulnerable to proposed US export restrictions
• UK refining capacity has declined from 1.27 million barrels per day across six plants in 2024 to 1 million bpd at four refineries after two closures in 2025

UK Diesel Prices Hit Record Highs Amid Iran Conflict

Key Developments:

UK diesel prices reached a record 199.18 pence per litre on September 28, 2026, surpassing the previous high of 199.09 pence set in June 2022 during the Russia-Ukraine energy crisis. The RAC reports filling an average family car now costs nearly £110, representing a £31 increase since the US-Israeli conflict with Iran began.

Market Impact:

Beyond consumer costs, elevated diesel prices are significantly increasing logistics and transport expenses across industry and agriculture sectors. Fuel prices remain a key driver of UK inflation, intensifying pressure on consumers already facing a prolonged cost-of-living crisis.

Supply Constraints:

International diesel prices have surged due to multiple factors:

• Shrinking global refining capacity
• Supply disruptions from Middle East and Ukraine conflicts
• Potential US export ban on diesel, supported by President Trump, threatening net importers like the UK and Europe

UK Vulnerabilities:

The UK's diesel dependency is substantial:

• Imports account for approximately 55% of domestic diesel consumption
• Diesel represents nearly 40% of total oil product imports
• The US supplies 31% of UK diesel imports
• Domestic refining capacity declined from 1.27 million barrels per day (six plants) in 2024 to 1 million bpd (four refineries) currently, following two closures in 2025

Outlook:

RAC's Simon Williams indicates only sustained lower oil prices over several weeks will reduce pump prices. He suggests government intervention through fuel duty reductions or VAT cuts to alleviate consumer burden. The combination of geopolitical tensions and reduced refining capacity suggests continued price pressure in the near term.