A deal has been signed. Your bills have not dropped yet — and here is why.
On 18 June 2026, the US and Iran signed a peace agreement ending a conflict that began in February. The Strait of Hormuz — through which nearly a fifth of the world's oil flows — is now set to reopen.
Markets moved fast. Oil prices fell. Optimism spread.
But Iran's nuclear programme negotiations have been deferred for 60 days, leaving real questions about how durable this deal is.
Here are five ways it hits your pocket.
1. Petrol and Diesel: Relief Is Coming, But Don't Hold Your Breath
UK petrol climbed from 132p to 154.72p per litre since February. Diesel went from 141.6p to 174.30p, per RAC Fuel Watch.
In the US, gas peaked above $4.50 per gallon before easing to $3.97. Diesel moved from $3.76 to $5.09, according to AAA.
Prices have started edging lower — but Simon Williams of the RAC warns pump prices rarely fall as fast as they rise.
Don't expect an overnight reset.
2. Energy Bills: The July Hit Is Already Locked In
UK gas prices nearly doubled after February — spiking from below 80p per therm to 157p in March, before settling at around 98p today.
That's progress. But it won't save you in July.
Ofgem has already set the next energy price cap. Average household bills will rise by £221 — a 13% jump — covering 33 million homes across England, Wales, and Scotland. That decision is final.
Energy consultancy Cornwall Insight says expecting a quick return to pre-war prices would be "overly optimistic."
3. Air Fares: The Sky Is Still Expensive
The Gulf supplies roughly half of Europe's jet fuel.
When the Strait closed, jet fuel rocketed from $784 to $1,838 per tonne. It has since come back to around $967 — still far above pre-war levels.
Argus Media jet fuel specialist Amaar Khan says airlines have enough supply for summer. But he expects prices to stay elevated for much of 2026.
Fare cuts are unlikely anytime soon. If you're managing a tight travel budget, our guide on smart ways to reduce living expenses has practical options.
4. Inflation: The Damage Is Already in the System
Before the war, inflation was falling across major economies. The conflict reversed that.
| Region | Feb 2026 | May 2026 |
|---|---|---|
| United Kingdom | 3.0% | 2.8% |
| United States | 2.4% | 4.2% |
| European Union | 2.1% | 3.3% |
UK inflation is still above the Bank of England's 2% target. The US jumped hardest — nearly doubling in three months.
Charlotte O'Leary of NIESR warns the Ofgem cap rise in July will push UK inflation higher regardless of falling oil prices.
The peace deal helps the outlook. It does not undo months of damage already baked in.
5. Interest Rates: Cuts Have Been Pushed Back
This is the one that hits borrowers and mortgage holders hardest.
The Bank of England held rates at 3.75% for a fourth straight meeting. Governor Andrew Bailey called falling oil prices "encouraging" — but said inflationary pressure remains in the pipeline.
The US Federal Reserve held at 3.5%–3.75%, citing "elevated uncertainty." The European Central Bank actually raised rates to 2.25% last week — its first hike in nearly three years.
Rate cuts many expected in 2026 are now likely pushed to 2027. Variable mortgage holders keep waiting. Savers, for now, keep benefiting.
For a deeper look at how rate movements shape investment risk, see our guide on types of risks in investment.
The Strait of Hormuz reopening matters. It removes the biggest single supply shock the global economy has faced in years.
But a signed deal is not a solved crisis. Nuclear talks are still open. Markets are still cautious.
Price relief will come — in months, not days. Plan as if costs stay high a little longer, and treat any savings as a bonus.
Reporting by the WealthBlueprint NewsDesk. Data sourced from RAC Fuel Watch, AAA Gas Prices, Argus Media, Cornwall Insight, the Bank of England, the US Federal Reserve, and the European Central Bank. This article is for informational purposes only and does not constitute financial advice.