UK diesel prices head toward £2 a litre as wars cut global refining

European crack spread crosses $100 a barrel for the first time

UK diesel prices have climbed 54% to 196.28 pence a litre since the Middle East crisis began in late February and are on track to reach a record £2 a litre within days, with some forecourts already charging above the psychologically important mark, The Guardian reported. The combined impact of Russian refinery strikes and the Iran-linked Middle East crisis has erased about a fifth of the world’s diesel supplies, and British households and small businesses are absorbing the cost at forecourt pumps.

Britain may be acutely exposed to the global squeeze on road fuel supplies. The number of refineries in the UK has dwindled since the start of the century from nine to four, causing the UK’s reliance on diesel imports to climb from 14% of the UK’s diesel consumption in the early 2000s to 54% last year, according to Fuels Industry UK. The trade group’s chief executive, Elizabeth de Jong, separately put the share of road diesel that is imported at about 55%. The same combination of wars has lifted UK inflation to 3.1%, well above the Bank of England’s 2% target.

The wave of Ukrainian drone strikes on Russian oil infrastructure reached the Kapotnya refinery on the south-east edge of Moscow over the weekend, one of Ukraine’s biggest air raids on the Russian capital since the start of the war and the latest salvo in an energy crisis now hitting forecourts thousands of miles away. In Europe, pump prices have hit record highs in recent weeks and are already above all-time highs across the United States, leading to unrest and growing calls for government leaders to protect consumers from the surge.

US President Donald Trump pressed Ukrainian President Volodymyr Zelenskyy in a call on Sunday to halt strikes on Russian refineries, citing concern that the attacks are pushing up global fuel prices, the Financial Times reported. On Truth Social, Trump said Russia had “unfortunately lost control of its Diesel Oil Industry” and called for an end to “this ridiculous and never ending war.”

Brent crude prices remain in flux — down nearly 3% at just over $100 a barrel on Monday — but the more pressing issue is not a shortage of crude but a shortage of refining capacity to turn crude into usable fuels. Iran’s effective blockade of the Strait of Hormuz, a vital Gulf oil trade route, has lifted the price of Brent crude to a four-year high, raising the cost of refined products including diesel and gas oil.

The Middle East crisis has severely damaged many of the region’s refineries, which once supplied 10% of the world’s fuels, and what little can be produced has struggled to circumvent the blocked trade artery. In China, which hosts the world’s largest refining capacity and had been the largest importer of Iranian crude, exports of refined oil products have been capped since March to safeguard domestic supply.

Output from Russia’s war-damaged refineries has fallen by almost a third over the past year to reach a 20-year low following sustained drone attacks by Ukraine, the International Energy Agency said. The Kapotnya strike came after a similar Ukrainian attack in June. Although Russian oil exports have faced toughened EU sanctions since 2022, reduced flows to other regions including Asia are likely to push global prices higher.

The global refining slump has helped keep oil market prices down by dampening demand for crude. But economists warn that the European “crack spread” — the price difference between crude oil and its refined products — has climbed above $100 a barrel on the continent for the first time, a level that will feed through the economy by raising the cost of all transported goods as well as household bills.

Diesel is “the workhorse fuel that powers business, haulage, deliveries and rural communities,” AA spokesperson Luke Bosdet said. “Increased fuel costs are passed on to customers, and then on to consumers, which adds to inflation.” Richard Smith, managing director of the Road Haulage Association, said: “Almost everything on supermarket shelves got there on a lorry. When diesel goes up that cost has nowhere to go but on to the price of goods.” The AA’s chief concern is for “small businesses, such as taxis and vehicle-based services, and rural communities who already do higher mileages even before diesel costs went through the roof,” Bosdet added. “They don’t get to add diesel surcharges to invoices, like many of the big companies, for fear of losing customers.”

The cost is hitting individuals hard. “Around half my day’s pay goes to filling up my car now,” Jon Barden, a former humanitarian adviser turned handyman in Tottenham, north London, told the newspaper. His diesel Ford estate, once used for camping trips, is now used to carry heavy tools to jobs in the area, and his fuel costs have doubled. “I’ve had to put my prices up,” he said. “I don’t want to because the people around here don’t have a lot of money. But when fuel prices go up everything else follows. The things I need to buy from Wickes to do a job will cost more before I even fill up.”

Mehmet, a London black-cab driver from Clacton who began driving 35 years ago, recalled: “When I first started, diesel cost 10 bob a gallon.” In modern terms that would be 11p a litre, a fraction of the £2 a litre average expected nationwide within days. Diesel taxis are easily outnumbered by electric vehicles in London but still make up about a third of the black cabs, and drivers were told in February they could raise fares by 4% this year — a rise that was above inflation amid concerns over an exodus of drivers. The Guardian reported that the US-Israeli bombardment of Iran ignited a war that has caused fuel costs to surge and inflation to remain at 3.1%, well above the Bank of England’s 2% target. “We’re stuck with it,” Mehmet said. “We don’t want the meter price to go up, because then we lose custom. But we can see oil companies making billions in profit while we take home less. How can that be right?”

Elizabeth de Jong, chief executive of Fuels Industry UK, said the trade group’s latest annual statistics, published earlier in the week, show UK demand for petroleum products increased by 1% in 2025 to almost 61 million tonnes, while the closure of the Grangemouth and Lindsey refineries reduced UK refining capacity by almost a quarter. “We are currently having to import about 55% of our road diesel, meaning a growing dependence on overseas supply,” she said. “Global events such as the conflict in the Middle East demonstrate the vital role that UK refineries play and why they are crucial to our economy.”