Strait of Hormuz Closure: What It Means for UK Energy Bills and Petrol Prices

Last reviewed: 20 June 2026 - Kael Tripton Editorial

What is the Strait of Hormuz?

The Strait of Hormuz is a 21-mile-wide waterway connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. It is the single most important energy chokepoint in the world. According to the International Energy Agency (IEA), approximately 20 million barrels of crude oil and petroleum products pass through it daily - roughly 20% of global seaborne oil trade. Around 20% of the world's liquefied natural gas (LNG) also transits through the strait, primarily from Qatar.

Major oil and gas exporters using the strait include Saudi Arabia, the UAE, Kuwait, Iraq, and Qatar. There is no viable alternative route for the volume these countries export.

What happened in March 2026?

Following coordinated US and Israeli strikes on Iranian military infrastructure on 28 February 2026 (codenamed Operation Roaring Lion), Iran's Islamic Revolutionary Guard Corps (IRGC) issued a formal declaration that the Strait of Hormuz was closed to international commerce. The closure was not a physical naval blockade in all areas, but the declaration, combined with naval presence and insurance risk escalation, effectively halted normal commercial shipping flows.

Brent crude prices surged past $90 per barrel within hours of the announcement, according to UNCTAD and market reporting. By March 2026, some analysts at FGE were warning of potential prices reaching $150-$200 per barrel under a prolonged closure scenario.

The IEA emergency response

On 11 March 2026, the IEA coordinated a release of 400 million barrels of emergency oil stocks from member countries - the largest coordinated release in the agency's history. Member countries hold more than 1.2 billion barrels of public emergency stocks. The release was designed to buy time for diplomatic resolution and prevent immediate catastrophic price spikes.

The IEA has also noted that only 3.5 to 5.5 million barrels per day can be redirected through Saudi and Emirati pipelines that bypass the strait. Given normal transit volumes of around 20 million barrels per day, the net implied shortfall under full closure would be significant.

Scenarios and outlook

Wood Mackenzie published three scenarios in May 2026:

• Quick Peace: Strait reopens by June 2026. Brent eases to around $80/bbl by end-2026, declining to $65/bbl in 2027 as market returns to oversupply. Global GDP growth slows from 3% (2025) to 2.3% (2026).
• Summer Settlement: Strait remains largely closed until September 2026. Oil and LNG shortages persist through Q3. Global GDP growth falls below 2% in 2026, with a shallow global recession in H2 2026.
• Extended Disruption: Strait remains largely closed through end-2026. Most severe economic scarring scenario. Prolonged inflation, industrial output impacts, and structural energy market shifts.

The LSE Business Review notes that a short closure is an oil shock, but a prolonged closure becomes a broader inflation and growth shock. The EIA identifies extended Hormuz disruption as the primary upside risk for further oil price increases.

What does this mean for UK households?

The UK's exposure operates through two main channels:

Petrol and diesel pump prices: UK pump prices are directly linked to wholesale oil costs via the Brent crude benchmark. The relationship is not immediate - there is typically a two to six week lag as fuel moves through the supply chain. The RAC and AA track retail fuel prices weekly. A sustained Brent price above $90/bbl would put upward pressure on pump prices.

Energy bills: The Ofgem energy price cap for domestic households is recalculated quarterly. Natural gas prices - influenced by global LNG market conditions - are a component of that calculation. LNG from Qatar, which transits Hormuz, is a meaningful part of the European gas market. Prolonged disruption to LNG flows would feed into the cap methodology with a lag of one to two quarters.

The UK's North Sea gas production provides some domestic buffer. However, the UK is a net importer of energy overall and is not insulated from global price movements.

Where to track UK fuel and energy prices

For current UK petrol and diesel retail prices, the RAC Fuel Watch and the Department for Energy Security and Net Zero (DESNZ) publish weekly fuel price data. For the Ofgem price cap, Ofgem updates the cap each quarter at ofgem.gov.uk.