But a lot has happened since the Office for Budget<\/a> Responsibility published those predictions fewer than three weeks ago.<\/p>\n Financial markets are now adjusting to the fact that a quick end to the conflict is unlikely.<\/p>\n Rachel Rickard Straus says oil price rises will affect numerous industries, from food and drink to oil-based products such as paint<\/p>\n How far the price of energy bills will escalate is hard to predict without knowing how the conflict will play out<\/p>\n Gas prices in Europe rose by 30 per cent as markets opened on Thursday and have more than doubled since the start of the war.<\/p>\n Oil prices are soaring, with Brent crude as high as $118 a barrel on Thursday, when Iran attacked Qatar\u2019s Ras Laffan hub through which a fifth of the world\u2019s supply of liquefied natural gas (LNG) flows in normal times.<\/p>\n Production there had been halted as a precaution, which could have been reversed once hostilities eased. Now the damage means a return to production could take months or longer, resulting in long-term disruption to global gas supplies.<\/p>\n Iran\u2019s threats to launch a \u2018full-scale economic war\u2019 by ramping up attacks on oil and gas sites mean there may be more to come from both sides.<\/p>\n Iran\u2019s attack followed Israel\u2019s strike on the world\u2019s largest natural gas field, South Pars in Iran, which accounts for about 70 per cent of the country\u2019s total gas production.<\/p>\n Meanwhile the continued closure of the Strait of Hormuz by Iran is disrupting global trade \u2013 and the shipment of oil in particular.<\/p>\n Higher oil and gas prices mean elevated costs at petrol pumps and higher energy bills for households. But they are far wider-reaching than that.<\/p>\n The cost of goods will inevitably rise as manufacturers face bigger energy burdens and have no option but to pass these on. The cost of transporting those goods will also rise \u2013 costs again passed on to the end customer.<\/p>\n It\u2019s hard to think of an industry that won\u2019t be hit. Manufacturers are warning of further price rises due to the growing expense of oil-based materials such as paint, packaging and wood.<\/p>\n The Food and Drink Federation warned that energy is embedded into every stage of the manufacturing process. The cost of food will be hit especially by inflated transportation costs and the soaring cost of fertiliser \u2013 which is very energy-intensive to make.<\/p>\n Even uPVC window and door installers warn that prices could rise by the summer, as the items are derived from petroleum-derived chemicals.<\/p>\n It\u2019s no wonder financial markets are now forecasting that UK inflation could go above five per cent again. And that may not be the end of it. If rising costs push cash-strapped households to their limit, they will cut back where they can. That could hurt the economy as people go out less, buy less, hire less.<\/p>\n Tax advisory firm Blick Rothenberg warns that the fallout of higher petrol and diesel costs could even make UK unemployment rise. Robert Salter, a director at the company, says: \u2018Businesses will be hurt financially, even outside of the transport and petrochemicals sectors, ultimately affecting their hiring plans.<\/p>\n \u2018High fuel costs may reduce the distance people are able to travel for work or to seek work, and therefore their employment options.<\/p>\n \u2018Rising inflation due to the Gulf conflict will increase running costs for businesses, reducing the number of entry level roles available.\u2019<\/p>\n Households facing higher inflation sometimes bring forward purchases before prices escalate.<\/p>\n But in most instances this is unrealistic. Few of us have the cashflow to buy in advance and doing so can be risky as the situation is so uncertain. If the conflict is resolved quickly, the price of goods may not rise significantly and then we\u2019re left with things we don\u2019t yet need.<\/p>\n Buying in advance can also be hazardous if large numbers of households do it as it can lead to shortages and embolden retailers to put up their prices.<\/p>\n However, you can take measures to protect your finances that you will not regret whatever happens. This could include paying down unsecured debt where you can and trying to build a cash savings buffer in case circumstances worsen.<\/p>\n Petrol prices<\/p>\n Petrol has increased by 10p a litre since the start of the conflict and diesel by double that, according to the RAC.<\/p>\n \u2018This is really starting to hurt drivers who do a lot of miles, especially those with diesel vehicles,\u2019 says RAC head of policy Simon Williams.<\/p>\n \u2018At 162p a litre they\u2019re now paying \u00a311 more to fill up on average than they were at the end of February.\u2019<\/p>\n The RAC predicts that if oil stays around the $100 a barrel mark, the price of diesel would be about 170p a litre, while petrol should not exceed around 148p.<\/p>\n However, with the crude oil price now exceeding that \u2013 and predictions that it could hit a troubling $150 a barrel \u2013 pain at the pumps could get a lot worse.<\/p>\n Energy bills<\/p>\n Energy bills are likely to be driven higher \u2013 but how far they will escalate is hard to predict without knowing how the conflict will play out.<\/p>\n Fortunately, if you\u2019re on your supplier\u2019s default tariff you will benefit from the price cap imposed by the regulator Ofgem.<\/p>\n This is set at \u00a31,758 a year for a typical household until the end of the month and then at \u00a31,641 for the following three months.<\/p>\n After that the picture becomes less clear so forecasts are very likely to change.<\/p>\n Energy supplier EDF on Thursday predicted a July to September cap of \u00a31,858, rising to \u00a31,919 from October to December and \u00a31,928 from January to March next year.<\/p>\n When energy bills soared because of Russia\u2019s war with Ukraine, the Government stepped in to offer financial support and shield households from the worst.<\/p>\n People with diesel vehicles are now paying \u00a311 more to fill up on average than at the end of February<\/p>\n Th war in Iran has led to a spike in oil prices, which increases inflation and hits investments<\/p>\n However, it is unclear whether such a move would be possible in the current economic climate.<\/p>\n With the cost of Government borrowing rising again, such a financial outlay may be prohibitively expensive.<\/p>\n If you want to protect yourself from the uncertainty, you could lock into a fixed energy deal that will set your price of energy at a certain rate for a year or longer.<\/p>\n There are still some deals available, although they are disappearing rapidly.<\/p>\n At the start of the conflict, there were 39 tariffs on the market. By Thursday, there were only 18 available. The cheapest tariff for an average household was \u00a31,509 \u2013 now it is \u00a31,695.<\/p>\n Go to thisismoney.co.uk\/energybills<\/a> to check the best deals available. It may be worth opting for a deal that is above the energy price cap for the certainty that it can offer you.<\/p>\n Mortgage and savings rates<\/p>\n As inflation marches back up again, central banks could turn to interest rate freezes or even hikes in an attempt to rein it in.<\/p>\n![\"Rachel](\"https:\/\/i.dailymail.co.uk\/1s\/2026\/03\/22\/20\/107328897-15668879-Rachel_Rickard_Straus_says_oil_price_rises_will_affect_numerous_-a-14_1774213033483.jpg\")
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