Oil prices latest: Rachel Reeves warns petrol stations ‘price gouging will not be tolerated’

Oil prices will normalise if and when the Strait of Hormuz is cleared, Reform UK leader Nigel Farage has predicted.

Speaking at a petrol station in the Derbyshire Peak District Mr Farage said: “At nine o’clock yesterday morning, the price of heating oil was very different to what it was at six o’clock yesterday evening.

“You might have noticed the spot price of crude rocketed to nearly 120 dollars a barrel (and then) came down to 84 dollars a barrel.

“If the Straits of Hormuz are cleared – I accept that’s an if… oil will be back into the low 80s and heating oil will be similar.”

Martin Lewis has issued advice for those worried about their energy bills amid fears the war in the Middle East will spark another cost-of-living crisis in the UK, with fuel prices set to soar.

You can watch what the money saving expert had to say below:

Sterling recovered from a Monday dip to trade 0.1 per cent higher at $1.3455.

Still, investors are worried that a sustained spike in fuel prices could curtail global growth by acting as a tax on business and consumption, while at the same time pushing central banks away from easing rates.

Political editor David Maddox reports:

The chancellor has warned that “this government will not tolerate price gouging”.

Answering Treasury questions in the Commons, she noted that yesterday while some forecourts were charging £1.30 a litre others were charging more than £1.80.

There are concerns that some retailers are trying to take advantage of the Iran war to provide cover to increase costs at the pump.

Ms Reeves said she will be meeting representatives of fuel forecourts in the coming days.

Her warning comes just after a similar one was sent to the providers of heating oil by energy secretary Ed Miliband.

Political editor David Maddox reports:

In Treasury questions in the Commons, Rachel Reeves was challenged by former Treasury committee chair Harriet Baldwin over her plans to press ahead with a 5p increase in fuel duty at a time when the war in Iran is pushing up fuel prices.

The chancellor said “we always keep these things under review”, but she sounded unwilling to reverse her plans.

She noted that fuel prices are currently 11p less per litre than they would have been with the previous Tory plans.

However, the question came just 24 hours after the cost of a barrel of oil shot over $100 for the first time since 2022.

A government minister has criticised “dangerous scaremongering” following claims that Britain has just two days of gas stored despite threats of disruption from the US-Iran conflict.

The reports emerged after analysis of data from National Gas – which owns and operates the nation’s gas transmission system – showed that it had 6,999 gigawatt hours (GWh) of fossil gas stored on Saturday. This is down from 9,105 GWh a year earlier.

These claims are based on some small truth: if the UK were to use only gas currently in storage without replenishment, it would run out in around 3.5 days (based on average nationwide use of 2,000 GWh a day).

The US and Israel’s war with Iran has effectively halted shipments through the Strait of Hormuz, where a fifth of global oil and liquefied natural gas normally passes along Iran’s coast, and producers have run out of storage and stopped pumping.

In the latest of near-daily reported attacks on shipping that have stopped tankers braving the strait, the UK Maritime Trade Operations Centre reported that crew aboard a bulk carrier in the Gulf had witnessed a splash and a loud bang.

After Iran chose its hardline new leader, oil prices briefly surged to nearly $120 a barrel on Monday. But by 1100 GMT on Tuesday, Brent crude had settled back down to around $92, suggesting traders now expected the disruption to end soon.

Trump said on Monday that US military might was sufficient to keep oil flowing. If Iran blocks oil through the strait, “We will hit them so hard that it will not be possible for them or anybody else helping them to ever recover that section of the world,” he said.

A spokesperson for Iran’s Islamic Revolutionary Guard Corps dismissed Trump’s remarks, saying Tehran would not allow “one litre” of Middle Eastern oil to reach the US or its allies while US and Israeli attacks continue.

“We are the ones who will determine the end of the war,” the spokesperson said.

In a later Truth Social post, Trump said: “If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far.”

Landing ship RFA Lyme Bay is being prepared for potential deployment to the eastern Mediterranean, the Ministry of Defence said.

The vessel has aviation and medical facilities allowing it to be used in support of humanitarian and disaster relief missions.

A Ministry of Defence spokesman said: “As part of prudent planning, we have taken the decision to bring RFA Lyme Bay to heightened readiness as a precaution, should she be needed to assist in maritime tasks in the eastern Mediterranean.”

Meanwhile, Type 45 destroyer HMS Dragon is due to be sent to the eastern Mediterranean to help protect Cyprus and the RAF bases there from further drone or missile attacks by Iran and its proxies.

On Monday, Defence Secretary John Healey told MPs the warship would sail from Portsmouth “in the next couple of days”.