Brent crude rose more than 6% to $100 a barrel on Thursday, the highest level since May, after Houthi militia attacked oil tankers in the Red Sea and U.S. forces conducted strikes against Iran. The price increase heightened concerns about tighter global energy supplies and pushed gasoline and diesel prices higher.

The price surge followed a brief ceasefire between the United States and Iran that had kept oil prices near pre‑conflict levels. The truce broke down earlier this week, prompting renewed military activity and a statement from U.S. Secretary of State Marco Rubio that Iranian leaders were not ready to make a deal. Ongoing hostilities in the region have raised concerns about disruptions to oil exports.

Petrol prices in the United Kingdom rose by 5 pence per litre since the start of July, reaching almost £1.56, while diesel averaged £1.72 per litre, according to the RAC. In the United States, average gasoline prices surpassed $4 a gallon, up from $3.92 a month earlier, said motorist advocacy group AAA.

Higher fuel costs have contributed to inflation trends. UK inflation fell to 2.6% in the year to June, helped by slower diesel and petrol price growth, and U.S. inflation was 3.5%, according to recent data. Investment manager Jonathan Raymond of Quilter Cheviot said that expensive fuel and energy can ripple through the wider economy, increasing costs for businesses and feeding into food prices. He warned that persistently elevated energy prices may pressure central banks to keep interest rates higher for longer or even raise them, a prospect that could strain mortgage holders and borrowers.

The Bank of England has kept its benchmark interest rate at 3.75% for four consecutive meetings. Paul Dales, chief UK economist at Capital Economics, said he believed the Bank will almost certainly hold rates again, though analysts expect cuts next year if energy price rises ease. Federal Reserve chair Kevin Warsh told Congress that the central bank has no tolerance to persistently elevated inflation and emphasized a commitment to restoring price stability amid the Middle East conflict. Former President Donald Trump had previously urged his successor Jerome Powell to cut rates, and Warsh indicated he will seek to fulfill Trump's demand for lower borrowing costs.