8th April 2026
The announcement of a two-week ceasefire in the Iran war has offered global markets a moment of relief but not certainty. At the centre of the story lies the Strait of Hormuz, the narrow maritime corridor through which roughly a fifth of the world's oil flows.
While the ceasefire has raised hopes that oil supply could normalise, a new and controversial factor has emerged: Iran’s push to charge ships for passage through the Strait. For UK drivers watching petrol prices climb, the key question is simple—what does this actually mean for the cost of filling up?
A Strait Reopens—But With Conditions
During the height of the conflict, the Strait of Hormuz was effectively restricted, sending oil prices soaring above $100 per barrel and triggering sharp rises in UK fuel costs.
The ceasefire has allowed partial reopening, but not a return to normality. Instead, Iran appears to be leveraging control of the Strait, with reports of ships being asked to pay millions of dollars per transit.
This is not yet a universally accepted system. Rather, it exists in a grey zone:
Informally happening now in some cases
Legally disputed under international maritime rules
Strategically positioned as part of a longer-term negotiation
In effect, the Strait is open—but conditional, uncertain, and politically charged.
The Real Cost of a "Toll"
At first glance, the economics seem modest. A typical oil tanker carries around 2 million barrels, and reported fees of $1-2 million per ship translate to roughly:
$0.50 to $1 per barrel
On its own, this would barely register at the pump. But oil markets do not price oil based purely on current costs—they price risk.
Once additional factors are considered, the impact grows:
War-risk insurance and security: +$1–3 per barrel
Supply disruption fears: +$5–15 per barrel
Delays and logistical friction: further upward pressure
This is why even the possibility of Hormuz tolls can move oil prices far more than the toll itself.
From Oil Price to UK Petrol Price
To understand what this means for drivers, it’s important to see how oil prices translate into what you pay at the pump.
In the UK:
Crude oil is the single biggest underlying cost driver
Prices are set globally and traded in US dollars
There is usually a 1–2 week delay before oil price changes hit forecourts
More than half the pump price is tax and VAT
As a rule of thumb:
Every $10 change in oil 5–7p per litre at the pump
What We’re Seeing Right Now
The Iran conflict has already had a visible effect on UK drivers:
Petrol prices have risen sharply—by around 20p per litre in a month in some cases
A typical tank now costs £11 more for petrol and £22 more for diesel
Some regions are seeing petrol around 157p per litre, with diesel approaching 190p
Even with the ceasefire, prices remain elevated because markets are not convinced the situation is resolved.
So What Do Hormuz Fees Mean for UK Drivers?
Putting it all together:
Short-term (during the ceasefire)
Oil prices may ease slightly as supply resumes
But fees + uncertainty keep a floor under prices
UK pump prices may stabilise—but not drop sharply yet
If tolls become permanent
Adds a structural cost to global oil flows
Likely to keep oil $5–15 higher than it otherwise would be
That translates to roughly +3–10p per litre in the UK
If the ceasefire collapses
Strait disruption returns
Oil could spike rapidly again
UK prices could surge back toward crisis levels
Why Prices May Not Fall Quickly
Even if oil prices drop, drivers shouldn’t expect instant relief:
Fuel already in the supply chain was bought at higher prices
Retail prices adjust with a time lag of around two weeks
Retail competition and margins can slow price reductions
This explains why prices often rise quickly but fall slowly—a frustration familiar to most motorists.
A Fragile Calm with Lasting Effects
The two-week ceasefire has reduced immediate fears of a total supply shock, but it has not restored normality. Instead, it has introduced a new variable into global energy markets: the potential monetisation of the Strait of Hormuz.
For oil traders, this is a geopolitical risk.
For governments, it is a strategic challenge.
For UK drivers, it is something more tangible:
Higher, more volatile fuel prices that may not fully return to pre-war levels anytime soon.
Ultimately, the price you pay at the pump is no longer just about oil—it is about who controls the routes it travels, and at what cost.