Oil prices are on track to reach $100 a barrel for the first time in 2023, after surging by almost 30 per cent since June.
Earlier in the year fuel prices had begun to level out, but Russian and Saudi Arabian production cuts and rising demand from China has led to increases.
Petrol and diesel prices in the UK have been rising as a consequence, and 10p has been added to the cost of a litre since June.
The average cost per litre of petrol is now £1.52, according to the motoring organisation RAC.
So, how long will this volatility last and what has caused the inflated prices? Here’s what we know.
Why are petrol prices rising?
The rise in the price of petrol is caused by a number of factors.
Firstly, Russia and Saudi Arabia, two leading oil producers, have cut production, accelerating depletion of global inventories.
Secondly, an increased demand for flights and fuel across the US, Europe and China has led to further supply reductions.
How much does fuel cost now?
The average price of petrol is now £1.52 a litre and diesel £1.58, while super unleaded costs £1.69 per litre.
In August the price of petrol was averaging £1.49 per litre.
Has the Russian invasion of Ukraine affected fuel prices?
Oil and fuel prices were high before the Russian invasion of Ukraine in 2022 and the war has exacerbated the situation, as Russia is one of the world’s largest crude oil exporters, second only to Saudi Arabia.
In an April 1, 2022 address, President Biden said: “Putin’s invasion of Ukraine has driven up gas prices and food prices all over the world.”
In January 2023 the UK imported no coal, oil or gas from Russia, and has been finding alternative sources for fossil fuels. The EU is also reducing its reliance on Russian fossil fuels, causing stronger demand for output from other suppliers and pushing up their prices.
In March, Chancellor Jeremy Hunt announced he was extending the 12-month 5p cut to fuel duty introduced by Rishi Sunak a year before when he was chancellor.
Will oil prices come down?
The Organization of the Petroleum Exporting Countries said in September that the market is facing a deficit that could potentially cause the most significant petrol shortage in more than a decade.
The International Energy Agency (IEA) also warned earlier in the month that the supply cuts made by Russia and Saudi Arabia posed a substantial threat to the continued price volatility.
In line with these, oil prices aren’t expected to come down significantly in the near future.