Brent crude was trading at $103.98 a barrel by mid-morning in London, down $4.36 from the previous session, as the global oil benchmark gave back some of its recent gains. The fall of about 4% offers limited relief to consumers and businesses, however, because crude remains roughly $36 a barrel — or 52% — more expensive than it was a year ago.
The move extends a volatile period for energy markets. A month ago, Brent stood at $90.16, meaning prices are still up more than 15% over that period despite the latest pullback. The scale of the annual increase underlines how far the cost of crude has risen since last autumn, when it traded near $68 a barrel.
Oil prices are notoriously difficult to forecast because they respond to a wide range of forces. Supply and demand remain the fundamental drivers, but expectations about future supply also matter. Geopolitical tension, decisions by OPEC+ producers, sanctions, severe weather and shifts in government drilling policy can all move the market sharply. In periods of heightened concern about recession or conflict, crude can swing suddenly in either direction.
For British households and businesses, the cost of crude feeds through to the pump, though not immediately or evenly. The price of petrol and diesel bundles together the cost of crude with refining, wholesale distribution, government taxes and the margin set by filling stations. Because crude typically accounts for more than half of the price per litre, sharp increases tend to show up quickly at forecourts. Declines, by contrast, often pass through more slowly — a pattern known in the industry as the «rockets and feathers» effect.
Higher oil prices also ripple through the wider economy. Expensive crude raises the cost of energy for heating and utilities, and it increases the expense of transporting goods, from warehouse to shop shelf. That can feed into the price of everyday items and complicate the outlook for inflation, which remains a central concern for policymakers and consumers alike.
The United States maintains a Strategic Petroleum Reserve to cushion the impact of severe supply disruptions, such as sanctions, storm damage or war. The reserve is designed as an immediate safety net rather than a long-term solution, supporting consumers and keeping critical sectors — including emergency services, public transport and key industries — running during emergencies. It can also take the edge off sharp price spikes when supply is hit.
Oil and natural gas markets are closely linked. When crude becomes more expensive, some industries switch parts of their operations to natural gas where possible, increasing demand for gas and potentially pushing its price higher. That interconnection means energy costs across the economy rarely move in isolation.
Brent is the main global benchmark for oil, pricing much of the world's traded crude, while West Texas Intermediate is the primary North American reference. The US Energy Information Administration now uses Brent as its main reference in its Annual Energy Outlook, reflecting its role as a clearer gauge of global market conditions.
History shows oil is anything but stable. The early 1970s brought the first major oil shock when Middle Eastern producers cut exports and imposed an embargo during the Yom Kippur War. Prices fell in the mid-1980s amid weaker demand and the arrival of more non-OPEC producers. They jumped again in 2008 on strong global demand before plunging with the financial crisis. During the 2020 Covid lockdowns, demand collapsed and prices fell below $20 a barrel.
More recently, US policy has shifted. In 2025, the Trump administration moved to reopen more than 1.5 million acres in the Coastal Plain of the Arctic National Wildlife Refuge for oil and gas leasing, reversing the Biden administration's limits on Arctic drilling. Such decisions can influence expectations about future supply, even if they take years to affect actual output.
Shale production is another factor. Shale is rock containing oil and natural gas, and the more the US accesses it, the greater the available supply — making it easier to prevent prices from spiking as sharply. For now, with Brent above $100 and up more than half on the year, the pressure on fuel bills and operating costs remains firmly in place.