By Osmond Chia and Nick Edser, Business reporters u2014 BBC Business
The cost of petrol and diesel has continued to rise as motorists wait to see if the US-Iran ceasefire leads to cheaper prices at the pump.
Oil prices had plunged initially after an agreement to pause the conflict was announced, but rose on Thursday due to concerns over whether the ceasefire would hold. The price of oil remains much higher than pre-war levels and drivers have been warned not to expect a significant drop in costs soon.
However, one motoring group has said fuel prices could start to fall over the next couple of weeks as long as the ceasefire is maintained.
Doubts over the durability of the US-Iran ceasefire emerged after Israel launched a wave of strikes on Lebanon. This led Tehran to warn of a u201cregret-inducing responseu201d if they continue, while US President Donald Trump has said the countryu2019s forces will remain in the region until Iran complies with the u201crealu201d ceasefire agreement.
One of the conditions of the ceasefire agreement was that ships would be able to safely use the Strait of Hormuzu2014a key shipping route for global oil and gas supplies.
But reports that Iran will keep the crucial shipping route closed because of the Israeli strikes has renewed fears of a lengthy disruption to energy supplies, which would keep fuel prices high.
The price of a barrel of Brent crude rose more than 3.5% to above $98 on Thursday as pressure mounted on what US Vice President JD Vance described as a u201cfragile truceu201d.
Since the war began on 28 February, wholesale oil prices have jumped by 35%. Crude oil is a key ingredient in petrol and diesel, so its price has a big influence on the cost of filling up a car.
According to data from UK motoring group the RAC, the average petrol price was 158.03p a litre on Thursday while diesel was 191.11p u2013 both slightly higher than the previous day. A tank of petrol is now u00a313.86 more expensive than it was at the beginning of the conflict at u00a386.92, the RAC said. A full tank of diesel now costs u00a326.80 more at u00a3105.11.
The RAC has said drivers should not expect a big fall in pump prices soon, although rival group the AA said wholesale fuel costs were now lower than they were at the start of the week.
u201cBased on the fuel industryu2019s rule of thumb of a 10 to 14-day lag between wholesale cost movements and those at the pump, drivers should expect prices on forecourts to level by next weekend and then fall u2013 providing the ceasefire holds,u201d said Luke Bosdet, the AAu2019s spokesman on pump prices.
Stock markets reversed some of the major gains they made on Wednesday. Japanu2019s Nikkei 225 index closed down 0.7%, while in Europe the UKu2019s FTSE 100 slipped 0.3%, Germanyu2019s Dax index was 1.2% lower and Franceu2019s Cac was down 0.6%. In the US, the Dow slipped 0.2% in early trade, while the S&P 500 and Nasdaq were roughly flat.
u201cI think thereu2019s a little bit of nervousness in global markets,u201d said Victoria Scholar, head of investment at Interactive Investor. u201cMarkets are giving back some gainsu2026 and I think that reflects a lot of uncertainty over whether the Strait of Hormuz is actually open.u201d
Ships in the Gulf have received a warning from Iranu2019s navy that any vessels seeking to cross the strait without permission u201cwill be targeted and destroyedu201d, shipping brokerage firm SSY has confirmed to BBC Verify.
Iranu2019s deputy foreign minister, Saeed Khatibzadeh, told the BBC that the country would u201cprovide security for safe passageu201d through the Strait of Hormuz. However, he said the reopening would only happen u201cafter the United States actually withdraw this aggressionu201d, seemingly referring to Israelu2019s attacks on Lebanon. There is disagreement over whether Lebanon is included in the ceasefire.
Vance is due to take part in negotiations with Iran in Pakistan on Saturday.
Only a handful of ships have passed through the Strait of Hormuz since the deal was announcedu2014well below the rate of some 130 vessels that transited daily before the war.
It will take a minimum of 10 days to clear the existing backlog of vessels, even if the strait resumes its usual volume of shipping, according to maritime tracking firm Pole Star Global.
Shipping through the Strait of Hormuz has been u201cunchanged in risk profile and numbers transitingu201d since the announcement of the ceasefire, according to maritime intelligence firm Windward. The company added that even under a best-case scenario, u201cweeks are required to move stranded gas and oil cargoes, and months for global trade to approach pre-crisis levelsu201d.
In recent weeks, some countries, including Malaysia, India and the Philippines, have negotiated safe passage for their ships.
Nils Haupt from container shipping firm Hapag-Lloyd, which still has six ships in the Persian Gulf, told the BBCu2019s Today programme that it was u201cvery difficult to plan because every day you get very different newsu201d.
Haupt said they were still waiting for official information on whether there will be fees to pass through the Strait of Hormuz, but warned that if there were it could have a major impact.
u201cIf this means that for the coming years there will be a fee for the Strait of Hormuz of millions which is double, triple the price of crossing the Panama Canal or the Suez Canal it would be quite ridiculous for the entire industry.u201d