28th October 2026
Renewed fears of war in the Middle East are pushing oil prices higher, with motorists, businesses and households facing the prospect of another expensive winter. The American elections may offer little reassurance.
Oil prices are refusing to give consumers much relief. On Wednesday, 28 October, Brent crude rose to around $115.50 a barrel after reports of an attack claimed by Yemen's Houthi movement on Saudi Arabia's largest oil refinery. Saudi authorities had not immediately confirmed the reported strike, but the incident was enough to revive fears about the security of energy supplies. Reuters report.
The latest increase is another reminder that the oil market is being driven not just by the balance between supply and demand, but by the possibility that an already dangerous conflict could become considerably worse.
For households and businesses hoping that fuel prices would ease, there is little immediate comfort.
Could the situation deteriorate after the elections?
One particularly worrying development is the possibility of renewed American and Israeli military action against Iran after the US midterm elections on 3 November.
ABC News reported on 22 October that American and Israeli military planners had drawn up options for further strikes, potentially including Iranian nuclear facilities. The report said the timing was linked to concerns that an attack before the elections could further destabilise oil markets and damage the Republicans' electoral prospects.
The White House has said the United States would not attack Iran before the midterms, while insisting that options remain open. The reports about military planning do not mean that renewed attacks are inevitable, but they underline the uncertainty facing the oil market.
There is an obvious political calculation. Higher petrol and diesel prices are unpopular with American voters, and a further escalation could make life more difficult for President Donald Trump and Republican candidates.
However, the end of an election campaign does not necessarily mean that military action will follow. Diplomatic negotiations could still produce an agreement, while the economic and military risks of another campaign would remain substantial.
Nevertheless, markets have to price in the possibility of events, not wait until they happen. That helps explain why oil can remain expensive even when there has been no confirmed interruption to a particular shipment.
Why the price could rise further
The main concern is the security of oil production and transport across the Middle East.
The Strait of Hormuz is one of the world's most important oil-export routes. Any prolonged interruption to shipping through it would create a serious supply problem, particularly if oil facilities elsewhere in the region were also damaged.
Saudi Arabia, Iraq, Kuwait, Iran and other producers are important to global energy supplies. Attacks on refineries, pipelines, terminals or tankers could make it harder to deliver oil even where production continues.
A further escalation could therefore push Brent above $120 a barrel. A much more serious and prolonged disruption could drive prices higher still, although nobody can reliably predict how far they might go.
There are also reasons why prices could fall. A diplomatic breakthrough, improved shipping security or evidence that supplies are recovering could remove some of the risk premium currently built into the market.
Oil prices have already demonstrated how quickly they can change when hopes of negotiations improve, only to rise again when another attack is reported.
The danger is that consumers become trapped between repeated price increases and brief periods of optimism.
Britain cannot escape the consequences
The effects extend well beyond motorists filling their cars.
Diesel is essential to road haulage, agriculture, construction and many public services. If fuel costs remain high, businesses will face difficult decisions about whether to absorb the extra expense, increase prices or reduce other spending.
Food prices are also exposed. Moving food from farms and factories to shops requires fuel, while agricultural production depends on machinery, transport and energy-intensive inputs such as fertiliser.
Some businesses operate on narrow margins and cannot absorb repeated increases indefinitely. School transport operators, delivery companies and contractors working for councils or the NHS may eventually seek to renegotiate contracts if their original prices no longer cover their costs.
Public bodies could then face an uncomfortable choice between finding additional money, reducing services or asking suppliers to continue working for less.
Inflation is another concern. If higher energy prices persist, the Bank of England could find it harder to reduce interest rates. That would put additional pressure on mortgage borrowers and businesses that depend on borrowing to invest.
A particular problem for rural Scotland
The impact could be especially difficult in Caithness and other rural parts of the Highlands.
Long travelling distances mean that many residents depend on cars, while businesses often have to transport goods over substantial distances to reach customers and suppliers.
Households outside the mains gas network face a further difficulty. Many rely on heating oil, which is exposed to movements in international energy markets. A reduction in gas standing charges offers them no direct relief from rising heating-oil prices.
Heating oil does not move in exact proportion to Brent crude. Refining costs, wholesale supply, delivery expenses and local competition also influence the price. Nevertheless, sustained increases in crude oil can eventually feed through to the cost of filling a domestic tank.
For households already struggling with food, heating and transport costs, another increase would be particularly unwelcome as winter approaches.
The danger is a prolonged energy shock
The crucial question is not simply whether oil reaches $120 a barrel. It is whether prices remain elevated for weeks or months, allowing the higher costs to spread through the economy.
A short-lived spike would be painful, but a prolonged period of expensive energy would be much more difficult to manage. Businesses would have to revise budgets, public bodies could face higher contract costs, and households would have less money available for other spending.
The coming weeks will be important. The American midterms, the possibility of renewed strikes against Iran, the security of oil infrastructure and the progress of diplomatic negotiations will all influence the market.
There is no certainty that the worst is still ahead. A credible agreement could bring prices down, just as a new attack could send them sharply higher.
But with Brent crude approaching $116 a barrel, it would be unwise to plan on an early return to cheap energy.
For Britain, and particularly for rural communities with long journeys and oil-heated homes, the prudent assumption is that uncertainty will continue. The hope must be that diplomacy succeeds before another escalation turns an already serious energy-price problem into a much deeper economic shock.