As US representatives travel to Pakistan on Monday for a second round of talks with Iran, the lack of clarity over a possible deal is once again expected to place upward pressure on petrol and diesel prices.
Hopes for cheaper fuel at the pump across Europe were dashed over the weekend after what looked like a breakthrough on the Strait of Hormuz turned out to be short-lived, sending crude prices higher and with them the cost of petrol and diesel.
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Markets had welcomed the news on Friday that the critical shipping route might reopen, only for developments over the weekend to reverse sentiment and push prices higher.
At the time of writing, US benchmark crude is up 10% from last Friday's low to around $87 a barrel, while Brent crude, the international standard, is 9.5% higher at roughly $94.3 a barrel.
The latest Weekly Oil Prices Bulletin from the European Commission was released last Thursday, before the US-Iran developments, and it showed the average price of Euro-super 95 petrol at €1.853 per litre in the EU.
According to the same data, the average price of diesel stood at €2.099 per litre.
Both figures, which include taxes, were slightly down from the previous week, but after multiple vessels were attacked in the Strait of Hormuz on Saturday and dozens u-turned after realising it was still not safe to pass, the expectation is now that prices will rise once again.
The same concerns are observed in the UK where the President of the Automobile Association, Edmund King, made sobering statements.
“For the first time in this conflict, we saw a slight price reduction at the pumps late last week, but that seems to be a false dawn. Global uncertainty seems likely to stop the fall in prices and if it drags on then prices will rise again,” King said.
The continuous disruption is also raising serious worries about jet fuel supplies.
Last week, the executive director of the International Energy Agency, Fatih Birol, declared that Europe has “maybe six weeks or so of jet fuel left”.
Latest on US-Iran negotiations
On Friday, Iran’s Foreign Minister Abbas Araghchi declared that the Strait of Hormuz would stay “completely open” to commercial vessels for the rest of the current ceasefire period.
US President Donald Trump promptly backed the statement on social media, describing the waterway as “fully open and ready for business”.
Benchmark prices reacted immediately by falling more than 10%.
Less than 24 hours later, however, it became evident that the situation had not improved.
Iran shifted its rhetoric, with officials highlighting what they called excessive US demands in any potential deal.
Reports also emerged of Iranian forces not taking their cue from the Foreign Minister, raising questions about internal coordination and uncertainty over who is leading and giving orders on maritime policy.
Nonetheless, US representatives, including special envoy Steve Witkoff and senior adviser Jared Kushner, are en route to Islamabad on Monday for renewed efforts to secure an agreement, according to White House announcements.
This follows the first round of talks in Pakistan that concluded without a breakthrough earlier in the month.
US Vice President JD Vance had been expected to join the delegation but Trump later confirmed he would not attend, citing security concerns.
