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Petrol prices to hit four-year high as US action on Iran threatens oil supply

Motorists will feel the impact of the collapse of the Iran nuclear deal with the price of petrol jumping by at least 2p a litre, according to the RAC.
The motoring association predicts that the price at the pump will rise to an almost four-year high thanks to a “toxic combination” of geopolitics and international currency movements.
"Prices are likely to rise by at least 2p a litre in the next fortnight as a result of the US decision to pull out of the Iran nuclear agreement,” said the RAC's Simon Williams.
“The price of oil has already jumped to $77 a barrel on the back of this news. The last time oil was this expensive was in November 2014 when prices were falling due to OPEC's [the Organisation of Petroleum Exporting Countries] decision to oversupply the market.”
Because oil is traded in dollars, the rise is likely to be felt by drivers in the pocket more acutely because of the pound’s relative weakness compared with four years ago.
Petrol prices to hit four-year high as US action on Iran threatens oil supply

An oil production platform in Iran, the output from which will be blocked from international markets
“The situation now is very different as supply is being curbed and the pound is far weaker at $1.35 compared with $1.57 back then, which makes fuel more expensive,” Mr Williams said.
According to RAC data, the collapse of the Iran deal will push the average price of a litre of unleaded fuel at the pump to 126.5p.
"The days of petrol and diesel at less than ?1 a litre in early 2016 are fast becoming a distant memory," Mr Williams said.
This means filling up the average family car with a 55-litre tank would cost ?70.
Petrol prices to hit four-year high as US action on Iran threatens oil supply

Donald Trump holds up a proclamation declaring his intention to withdraw from the Iran nuclear agreement 

Credit:
Reuters
The view was echoed by the AA, which pointed to a wider trend among major petro-economies of trying to limit production to end what they claim is a supply glut.
"The reality is that drivers are facing a steep rise and although we are a way off from it, we could be heading to the bad old days of 2010 to 2014 when petrol peaked at 142.48p a litre," said a spokesman for the motoring group. 
President Donald Trump pulled out of an international treaty with Iran to curb its nuclear programme in return for ending economic sanctions against the Middle Eastern nation. This means Iranian oil will not flow into the global market, reducing supply.
A host of other industries are also likely to feel the impact of having to pull out of Iran, with the aerospace sector one of the biggest losers, missing out on $40bn of orders for airliners.
Foreign companies working in Iran have up to 180 days to wind down their with operations in the country.
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