Cost of living ravaged families have been warned of more pain to come with the latest fall-out from the ongoing Middle East conflict, as oil prices have jumped above $100 a barrel15:14, 09 Sep 2026Millions of households face “brutal” fuel and energy price hikes after a fresh escalation in the Middle East war.‌Oil prices jumped above $100 a barrel for the first time since July this year as the US and Iran launched fresh tit-for-tat attacks against one another. Fears of ongoing disruption from the conflict and the closure of the Strait of Hormuz also triggered a jump in UK wholesale gas prices to more than 196p per therm, the highest since late 2022. Prices across Europe also rose.‌The latest jump threatens to unleash fresh financial pain on households and businesses, with consequences for the economy and the public finances as well.‌The most immediate impact is expected to be fuel prices for already hard-pressed motorists. It comes on a top of a 5p a litre jump in unleaded in the past week alone on the back of a rapid rise rise in oil prices. The nationwide average for unleaded has jumped to 167.17p a litre, a fresh four-year high. Diesel has also gone up by 5p to 188.63p a litre. The spike has means the cost of filling a family-sized car has increased by £2.75 over this short period, according to the RAC.RAC senior policy officer Rod Dennis said: “The latest price rises throw into sharp focus just how exposed UK drivers can be to events thousands of miles away.” The motoring group says there is a “very strong case” for Chancellor John Healey scrapping a scheduled fuel duty increase in January.‌Howard Cox, founder of the group FairFuelUK, focused on rising diesel prices, and the impact it is having on commercial users and the economy. “Diesel prices aren’t rising because oil is expensive - they’re rising because the world can’t refine enough of it,” he said. "That’s a structural crisis, and it means UK pump prices are about to surge sharply. We’re already near 190p a litre, and without urgent action, diesel could smash through £2 a litre, hammering motorists, hauliers, small businesses and the entire economy.”Higher wholesale energy costs, made worse by a gas storage shortage, threatened to lead to even higher winter bills. Regulator Ofgem’s price cap rose by 4% in October, after a big hike in July, and warnings of more to come in January.‌Andrew Goodwin, chief UK economist at Oxford Economics, said: The increase in wholesale gas prices has more than offset the saving from the government removing VAT from electricity bills between October and March. We think the price cap could rise by another 13% in January – wholesale prices are currently well above the level of the previous observation window, and our commodities team expect them to remain high in the near term.”Simon Francis, coordinator of the End Fuel Poverty Coalition, said: “The wholesale cost of gas has hit a high not seen since December 2022, while heating oil prices have also surged upwards again. The Ofgem price cap for January is being calculated on prices like these, which means it could be brutal for households already struggling. Those who use heating oil or are on some heat networks and are not on the price cap may see increases even sooner.”Higher energy prices are likely to feed through to inflation and the wider cost of living for families.Article continues belowMr Goodwin predicts the Middle East conflict will mean inflation will reach almost 4% around the turn of the year. “We don’t expect the period of higher inflation to translate into materially higher pay growth, in contrast to the 2022 energy price spike,” he said. “We think this will mean that workers will have limited ability to secure higher pay rises – either from their current employer in the early-2027 pay round or through moving jobs – to mitigate the impact of higher prices.”