Everything that could go up in price amid Strait of Hormuz closure

The closure of the Strait of Hormuz could severely impact people's finances across the UK, from energy bills to mortgages. The waterway between the Persian Gulf and the Gulf of Oman and the Arabian Sea is a critical international shipping route, with the disruption potentially affecting global oil and gas supplies. US President Donald Trump announced a decision to postpone strikes on Iranian energy facilities by five days, having warned of an attack if the nation does not reopen the Strait of Hormuz by midnight on Monday. The threat being suspended but not withdrawn could mean that an effective closure of the vital international shipping route continues for longer. Prime Minister Sir Keir Starmer's official spokesman said on Monday that the "Strait of Hormuz specifically needs to be reopened". Get MEN Premium now for just £1 HERE - or get involved in our WhatsApp group by clicking HERE. And don't miss out on our brilliant selection of newsletter HERE. The Press Association has looked at 10 ways that the disruption to the strait could affect people's finances: A significant consequence of disruption to the Strait of Hormuz is on the world's oil and gas supplies. The strait is a crucial shipping channel, used by tankers carrying about one fifth of the world's oil supplies and seaborne gas. In 2024, around 20 million barrels of oil flowed through it per day, the US Energy Information Administration said. It estimated that more than 80 per cent of the crude oil and liquefied natural gas (LNG) that moved through the Strait of Hormuz went to Asian markets in 2024. Whilst UK imports from the Middle East are limited, disruption to supplies means demand for alternatives go up, sending global prices higher - which is what has happened to crude oil and natural gas prices in recent weeks. One of the fastest ways that rising crude oil prices impact households is through the cost of wholesale fuel, which is driving petrol pump prices sharply upwards. The average price of unleaded petrol has increased by 14p a litre, or around 11%, since before the escalation of the conflict in the Middle East at the end of February, according to the latest figures from the RAC. The situation is worse for drivers of vehicles using diesel, which has risen by 29p a litre, or about 20%, to reach the highest price since January 2023. Simon Williams, the RAC's head of policy, said drivers were "in for a rough ride at the pumps in the run-up to the Easter break with no end to price increases in sight". The effect of higher wholesale energy prices is likely to take longer to appear in household gas and electricity bills, with prices currently fixed until the end of June. But July is when the energy regulator Ofgem sets its next price cap, which will be based on average prices between March and May. Energy consultancy Cornwall Insight said its forecast for the watchdog's next price cap had surged to £1,973 a year for a typical dual fuel household - an increase of £332 or 20 per cent on April's cap. It is updating its forecasts every week whilst energy markets remain volatile, and the figure is likely to change. The Bank of England also cautioned last week that even a brief conflict could result in energy prices remaining high for an extended period, leading it to increase its UK inflation forecast through 2026. Home heating oil, utilised by approximately 1.5 million households in the UK - predominantly in Northern Ireland - is not included in Ofgem's price cap. The UK's Competition and Markets Authority (CMA) is investigating concerns that households dependent on heating oil are experiencing sudden price hikes due to the conflict. The Government recently declared that around £50 million will be allocated to assist low-income families who heat their homes with oil. Some £17 million has been designated to Northern Ireland, England will receive £27 million, Scotland £4.6 million and Wales £3.8 million. Regions in the Middle East are significant producers of fertiliser used for farming, such as ammonia and sulphur, so any disruption could escalate costs for farmers globally. Experts indicated that fertiliser price surges could impact products like bread, cereals, pasta, potatoes and animal feed. Jonathan Owens, a supply chain expert and senior lecturer at the University of Salford, stated: "Rising costs and shipping delays could disrupt planting and harvesting cycles if this plays out for the long term. "Livestock farmers may also face challenges as feed prices increase, putting additional pressure on meat and dairy production. These disruptions could threaten the stability of essential food supplies, making some staples more expensive or harder to find. "Over time, we may see certain product choices diminish or disappear, like what happened during the pandemic." Increasing oil and shipping expenses alongside disruption to supply routes and raw materials could begin to affect shop prices in the coming months. Fashion, electronics and homeware might be impacted if freight costs rise or delivery times extend, as numerous UK brands depend on global supply routes that pass through or near the region. Manufacturers and businesses that consume significant energy could also be affected by higher wholesale prices, and this could result in costs being passed on to consumers through higher shop prices. The effect on shop prices will depend on the duration of the conflict and how long energy prices remain elevated. Analysts have indicated specific categories to monitor include fragrance, as the Middle East plays a crucial role in producing ingredients used in many perfumes, particularly oud and other luxury scent bases. Marty Bauer, a retail analyst at Omnisend, said: "Luxury confectionery is another area The recent surge in popularity of pistachio-rich 'Dubai chocolate' and Middle Eastern-inspired sweets relies on imported nuts and speciality ingredients. "If shipping routes are affected or costs rise, those products may become more expensive or harder to source. The countries currently affected by conflict are also big producers of dates, olive oil, nuts and spices such as saffron." The turmoil in the Strait of Hormuz and its subsequent effect on energy prices has already altered the trajectory for UK borrowing costs, which had been on a downward trend before the conflict. Last week, the Bank of England maintained interest rates at 3.75% in the first unanimous vote since 2021. Governor Andrew Bailey warned that further cuts were "not on the horizon", whilst hinting at potential increases to borrowing costs instead. Other policymakers at the Bank suggested that interest rates may need to rise due to sustained pressure on inflation. Over the past couple of weeks, Britain's largest lenders have been increasing their mortgage rates, whilst nearly 1,500 homeowner deals have vanished from the market, according to financial information website Moneyfacts. Lenders have been rushing to raise the mortgage rates they offer and withdraw some products amid shifting expectations for inflation, with the conflict in the Middle East exerting pressure on prices. Swap rates, which lenders use to price mortgages, have been climbing in recent weeks. The disruption to global energy markets is causing significant volatility in the world's financial markets, leading to increased uncertainty for investors. Experts have proposed that investors could profit from adopting a long-term perspective on their investments and assessing whether their portfolios are suitably diversified. Tom Stevenson, investment director for Fidelity International, stated: "The swing in relative performance makes a strong case for holding a diversified portfolio, geographically if not at the moment by asset class. "Holding a good spread of investments can provide a smoother ride over the longer term. The ups and downs of the market during periods of uncertainty are the price investors pay for those superior long-term returns."