Heating oil prices
August 2026

Where prices stand

July 2026 was one of the most volatile months UK heating oil buyers have seen in some time. Prices opened the month at 71.4p on 1 July and fell as low as 69.9p on 6 July before a dramatic reversal that took kerosene to a high of 89.7p by 27 July. That is a swing of nearly 20p within a single month, and it explains why the monthly average of 82.4p understates the scale of what happened. The final days of July saw prices settle in a narrow band between 87.6p and 89.1p, leaving the market at elevated levels.

Compared to June 2026, when the average price was 76.9p per litre, July was significantly more expensive on average, and the closing price level of around 89p represents a gain of more than 16p from the monthly low. The price surge was concentrated between 8 July and 15 July, when kerosene rose from 74p to 89.4p in seven days. That is the kind of move that catches buyers who have been waiting for prices to fall. The 500L price averaged 82.0p in July, broadly in line with the 1000L figure, suggesting the usual small-volume premium compressed slightly during the spike.

What has driven the market

Brent crude oil

Brent crude was the primary driver of July's price surge. After stabilising near $73 in early July following a steep fall from spring highs, Brent recovered sharply as the Iran situation deteriorated. The collapse of a US-Iran ceasefire and subsequent US military strikes pushed Brent through $79, then above $88, and reports from 22 July noted Brent at $92. By late July, Brent had crossed $100 on the back of Houthi attacks on Red Sea shipping and Hormuz disruptions, before pulling back toward $88 to $90 in the final days of the month. The monthly average Brent price for July was $83.89 per barrel. That trajectory fed directly into UK retail kerosene prices, with the sharpest crude gains in mid-July translated into retail prices within two to three days.

Sterling and the dollar

Sterling provided a small but meaningful buffer against the worst of the crude price rises in July. The average GBP/USD rate for July was 1.3371, and the pound has since strengthened slightly to 1.35 in early August. Because UK heating oil is priced in dollars at the wholesale level, a stronger pound reduces the sterling cost of imported fuel. The improvement from 1.3371 to 1.35 is modest, worth roughly 1p to 1.5p per litre in reduced import cost, but it has helped prevent retail prices from climbing as fast as crude alone would suggest. If sterling holds above 1.35, it will continue to act as a modest downward pressure on what UK buyers pay at the pump.

Seasonal demand

July and August are typically the lowest demand months of the year for domestic heating oil. Most households are not heating their homes, and tanks filled in spring are often still holding enough for the summer. That seasonal weakness in demand is one reason prices stayed low in the first week of July, below 71p, before geopolitical events overwhelmed the usual summer pricing dynamics. Normally, summer is the best time of year to buy heating oil at a discount ahead of autumn. This year, that window was very short, lasting only from late June to around 7 July. Buyers who held off and waited through mid-July paid a significant penalty. With autumn demand starting to build from September onward, the seasonal window for lower prices has now largely closed.

UK market factors

Domestic supplier competition remains active but has not been sufficient to offset the scale of the crude price rises seen in July. Regional price variation was wide in July, with the national range running from 65.6p to 94.1p per litre, a spread of 28.5p. That level of regional variation points to differences in local supplier competition, logistics costs, and the speed at which wholesalers pass through crude price changes. Delivery lead times tend to lengthen in late summer as distributors manage capacity ahead of the autumn demand uptick, and buyers in more rural areas or those with older supplier relationships may face less competitive quotes. Group buying schemes and comparison platforms offer one of the most reliable ways to close that gap.

Regional price variation

As a rough guide for August 2026:

• Scotland: Prices typically sit at the upper end of the national range due to longer delivery distances and higher logistics costs, and the current market above 89p per litre will be felt more acutely in rural Highland areas.
• Northern Ireland: A separate wholesale supply structure means prices do not always track Great Britain movements exactly, but the same Middle East risk premium is present and buyers should expect quotes near or above current mainland levels.
• North of England: Competitive distributor networks in Yorkshire and the North West have historically helped keep prices closer to the national average, though the tighter margin environment in a rising market compresses that advantage.
• Midlands: A well-served distribution area with reasonable supplier competition, but buyers here saw the same sharp July spike and should not assume prices will retreat significantly.
• South West: Remote rural areas in Devon and Cornwall face higher delivery costs and less frequent delivery schedules, which tend to push prices toward the top of regional ranges.
• South East and East Anglia: These areas benefit from port proximity and strong competition among suppliers, which can produce quotes closer to the lower end of the national range.

The outlook ahead

The one-month forecast points to prices in the range of 89p to 92p per litre through August 2026, reflecting continued upward pressure from Middle East supply risks and a Brent crude price holding firm near $90. Ukrainian drone strikes on Russian refinery infrastructure, including reported attacks on the Lukoil Volgograd facility and Caspian shipping routes, are adding a separate supply risk premium that was not present earlier in the year. Buyers should not expect a return to the sub-75p prices seen in early July. The base case is that prices stay elevated and inch higher rather than retreat.

Looking three to six months out, the forecast is for further gains, with prices expected in the range of 90p to 95p by October and potentially 91p to 99p into the winter period. Seasonal demand recovery through autumn will coincide with persistent geopolitical risk and the possibility of further Hormuz or Red Sea disruptions. ADNOC's new crude pricing mechanism also introduces an element of pricing uncertainty that markets have not fully priced in. Buyers considering their winter fill should weigh current prices of around 89p against a forecast that suggests 95p or higher is plausible by the time heating demand peaks.