Drivers warned of diesel shortage as some UK areas 'particularly at risk'
Fuel prices have risen sharply across the globe since the Iran war started three months ago
An intergovernmental organisation has warned that the UK's rural areas would be at risk of diesel shortages if the war in Iran continues to pressure oil supplies.
Organisation for Economic Co-operation and Development (OECD), forecast lower economic growth worldwide, with potential shortfalls for key energy products. The OECD forecast economic growth of 0.9% in the UK this year, up from the 0.7% forecast in March.
Fuel prices have risen sharply across the globe since the Iran war started three months ago when the US and Israel carried out joint strikes on several key Iranian sites.
Iran retaliated by striking sites across the Middle East and closing the Strait of Hormuz waterway, through which 20% of global oil traded passes.
OECD has warned that local fuel shortages could impact activity, with certain parts of the UK at risk of lower output.
"Localised shortages of diesel could weigh on activity, especially in rural areas," it said.
Chancellor Rachel Reeves has already intervened to support rural consumers reliant on domestic heating oil, which has soared in price since the outbreak of the conflict.
The Strait of Hormuz is also known to see the movement of fertilizer, critical for farming and food supply across the world.
OECD also warned that the UK could faces a significant challenge from the increased fertiliser costs as a result of the conflict feeding through to higher food prices.
The organisation said it expects inflation to average 3.7% in 2026. Inflation is expected to peak third quarter, before falling back next year to 2.4%. This remains above the Bank of England's 2% target rate.
Responding to the OECD release, Reeves said: "The conflict in the Middle East poses a significant challenge to the world economy. Despite this, the OECD now expects UK inflation to be lower and growth higher than previously thought."
"We have the right economic plan, and changing course would put that progress at risk, with families and businesses paying the price."
