The price of oil is trading around its highest level in over two years, spurred by Turkey’s threat to cut crude flows from Iraq’s Kurdistan region, triggering fears that motorists in the UK could soon face a fresh rise in prices at the pump.
The pipeline to Turkey’s port of Ceyhan usually pumps between 500,000 and 600,000 barrels per day, according to Reuters.
But on Monday, Turkish President Tayyip Erdogan threatened to cut off that pipeline in the wake of the Kurdish independence referendum.
The prospect of losing that supply, combined with the 1.8 million barrels a day of supply cuts by the Organisation of the Petroleum Exporting Countries (OPEC) and other non-OPEC producers, has raised supply fears, analysts said.
On Tuesday, Brent crude was trading at around $58.60 per barrel in London, having on Monday hit $59.49, which was its highest since July 2015, according to Reuters.
The latest rally in prices may spark fresh concerns about the cost of petrol rising in the UK. On Friday, Sainsbury’s, Asda and Morrisons all announced that they were cutting prices at the pump.
Even though oil has been trending higher— partially because of the hurricane season in the US— the strengthening of the pound against the dollar in the recent weeks allowed the supermarkets to bring petrol prices down as oil is traded in dollars.
But in recent days the pound has flat-lined against the dollar.
The average UK price of a litre of unleaded petrol hit a six-month high of £1.19 last week, while diesel hit £1.21 for the first time since May, according to figures from the Department for Business, Energy and Industrial Strategy.
