Why are fuel prices still so high after US-Iran peace deal?

The US-Israel war with Iran sent oil prices soaring - and that in turn pushed up the cost of petrol and diesel. But now that the US and Iran have signed a peace deal, you might be asking why prices at the pump are still so high.

According to the AA, the average cost of a litre of petrol is 152.9p.

That’s lower than the peak of 159.7p we saw during the conflict.

Similarly, a litre of diesel now costs 170.5p.

That compares with 192.4p during April.

On the face it, that reads as good news.

Yes, fuel prices are lower than they were during the war.

But they’re still higher than they were before the war.

In fact, petrol is about 20p more costly today than it was before the conflict began, and diesel is 28p more expensive.

"While drivers have been pleasantly surprised by the speed of price falls at the pump, there is some way to go before prices return to where they were before the outbreak of the war,” said AA president Edmund King.

Middle East situation remains unpredictable

The peace deal was a massive step forward and traffic through the Strait of Hormuz - a key shipping route that about a fifth of the world’s oil supply passes through – is slowly resuming.

That’s eased the pressure on oil prices and the global supply chain.

But talks to end the conflict once and for all are still ongoing, with discussions focusing on contentious issues like ending Tehran’s nuclear programme.

If the talks fail, we could easily see the uneasy truce unravel completely, in which case oil prices will start heading upwards once again.

Mr King believes this “uncertainty” is prompting some drivers to fear “prices could go the other way.

"The hope is that pump prices continue to tumble with the summer getaway late in July now coming into view,” he added.

How to save money on the road

If you want to keep costs down when you’re behind the wheel, there are a few steps you can take.

Drive more efficiently

How you drive has a big effect on how much fuel you use, so try to cut consumption by driving efficiently.

For example, you could make a point of accelerating gently, braking gradually and driving in the correct gear

Shop around for the best fuel prices

Real-time petrol and diesel prices are now available on platforms like:

• Google Maps
• Confused.com
• DriveScore
• Fuel Finder UK
• Fuel Spy
• MotorMouth
• PetrolPrices.com
• RAC Fuel Watch 

So instead of taking the chance of paying over the odds, shop around for the cheapest petrol and diesel prices in your area.

Use loyalty schemes, smartly

Supermarkets and major petrol station chains offer loyalty schemes where you can get a discount on your fuel.

So if you use the same petrol station regularly, it could be worth signing up, especially if it already offers competitive prices.

Look after your vehicle

Good car maintenance makes a big difference to fuel consumption, so make sure it’s serviced regularly, your tyres are at the correct pressure and the wheels are properly aligned.

For more money-saving tips, check out our list of 50 ways to cut your fuel costs.