Petrol prices set to fall to lowest in three months amid peace talks between the US and Iran

Petrol prices set to fall to lowest in three months amid peace talks between the US and Iran Hopes of an end to the Middle East conflict has seen oil prices drop to the lowest level since the war erupted - with benefits for drivers and the economy in general Petrol prices could drop back below the 150p a litre mark nationally next week amid hopes of an end to the Iran war. The cost of oil has fallen to levels not seen since before the Middle East conflict erupted as traffic through the key Strait of Hormuz shipping route gradually resumes. Brent crude has dropped below $73 (£55) a barrel, around the level it stood at before US President Donald Trump along with Israel went to war with Iran at the end of February. The drop is expected to feed through to pump prices, in much needed relief for millions of motorists here. Simon Williams, head of policy at the RAC, said: “On the back of the lowest oil price since before the Iran war started, drivers should see the average price of petrol fall below 150p in the next week or so. If this happens, unleaded will be at its lowest price since March 26. “Diesel, having dropped below 170p for the first time since March 22 as shown in the Government’s Fuel Finder data, ought to go back under 160p. We urge retailers to pass on the savings they’re benefitting on the wholesale market to drivers straightaway. Before the war began we had an oil price of $70 which translated to an average petrol price of 132p and 141p for diesel.” The national average for petrol has fallen by 7.2p a litre since peaking on May 28 at 159.53p, and diesel has tumbled by 22.17p since its high of 191.54p on April 15. The drop will dent the Treasury’s coffers as the price spikes had delivered a tax windfall. However, any benefit is likely to have been offset by lower spending on other items as motorists try to make ends meet. Falling fuel prices should also begin to feed through to the inflation. AA president Edmund King said: “While drivers have been pleasantly surprised by the speed of price falls at the pump, there is some way to go before prices return to where they were before the outbreak of the war.” Mr King claimed some drivers will fear “prices could go the other way” because of “uncertainty” over the future actions of Iran and the US. He added: “The hope is that pump prices continue to tumble with the summer getaway late in July now coming into view.” US Energy Secretary Chris Wright told a forum that flows through the Strait of Hormuz were close to those before the war began, with at least 20 million barrels having exited the waterway in the last 24 hours. Normalisation would take a few weeks, however, because the strait needs to be demined, he added. “Most of the increase in flows from the Gulf is outbound ships exiting the Strait,” UBS analyst Giovanni Staunovo said.