Donald Trump has raised hopes that the US-Israel military strikes on Iran may soon be over.
Financial markets have certainly taken that on board, with energy prices falling back from the war-level highs seen yesterday.
But were the president’s remarks deliberately aimed at taking heat out of those prices as countries across the world count the cost of the conflict?
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It has already inflicted huge damage across the oil and natural gas-rich Middle East.
The region is crucial to global price stability because of those resources, and UK businesses and consumers are already paying a price, with the likelihood of much worse to come even if the war were to end now.
Here, Sky News explains what’s happened and how you will be affected.
Oil
This chart tells you all you need to know.
Any spike in global oil prices takes time to filter through fully. Black gold, as it is known, might be the enemy for the health of our planet, but it remains the crucial cog for the health of the global economy.
Oil prices will only recover to pre-war levels when Middle East output and deliveries through the key Strait of Hormuz have resumed.
The trouble here is that the biggest production sites for oil, and natural gas too, in the region have been shut down and it can take weeks to safely restart operations following any suspensions.
It means that an end to the war is not necessarily a quick fix for oil prices, with deeper consequences ahead. More on those later.
Fuel
This is where we have first seen the effects of rising oil prices.
The old saying goes that UK fuel prices are quick to rise and slow to fall.
Rewind to Monday 2 March – the first chance financial markets had to react to news of air strikes on Tehran the previous Saturday – and the Brent crude oil price rose by about $5 to almost $78 a barrel by the close.
Sky News was told that UK wholesale costs had risen by 2p a litre that Monday night. For diesel, it was 7p.
According to the RAC, average pump costs since the war started were 5p a litre higher for petrol on Sunday at 137.5p, while diesel had shot up by 9p to 151p.
The motoring group is warning that more increases are on the way as forecourts are restocked with more expensive fuel.
The price picture is not helped by the fact that the pound has fallen in value versus the oil-priced dollar.
It is impossible to say how far prices could go but the industry has been warned by the Competition and Markets Authority that it will act if it sees any evidence of profiteering – building on its fuel market findings that drivers have been paying over the odds for years.
Heating oil
This is the lifeblood of the UK’s rural communities.
Inevitably, the cost of heating oil for new deliveries has risen as oil costs have gone up.
But according to data from provider BoilerJuice, the average cost of a 1,000-litre top-up stood at 133p per litre on Monday.
That is more than 120% up on where the cost stood on 28 February – the day the first bombs dropped.
As with fuel prices, users are being urged to shop around if they need a delivery.
Household energy
Here is where the news is a bit less painful.
The energy price cap shields households on that default tariff from any immediate shocks in the global energy markets.
The level for April through to the end of June has already been set – at £1,641 it is £117 down on an annual basis for the average user of gas and electricity paying by direct debit.
However, current market prices are already influencing the calculations for the next cap level which will be set in May for July-October. Forecasts last week, before we saw the big spike in natural gas costs of up to 100%, indicated a 10% rise to £1,800 was possible.
If you are on a fixed rate deal that is ending, as of Monday there were still offers in the market that were coming in at an average annual £1,640 – just beating the predicted price cap level due to begin at the end of the month.
What it all means for inflation
A quick recap.
The UK’s consumer prices index (CPI) measure had been widely expected to tumble from its current level of 3% to around 2% within the next few months – mostly because of easing energy costs.
On Monday, Chancellor Rachel Reeves acknowledged there would likely be upward pressure on the pace of price growth in the economy due to the war-led energy spike.
Those elevated costs will not only feed into the cars we fill with fuel and our household energy bills but the prices factories face for raw materials, the charges factories impose for manufactured goods and the food we consume.
A forecast by Oxford Economics last week saw the chance of a 0.6 percentage point hike for inflation by the year’s end, assuming the war was short-lived.
Crucially, and this is where it gets a bit more complicated, this prediction was purely based on so-called second-round effects – indirect consequences such as price-setting behaviour by businesses.
Does this threaten an interest rate rise?
The Bank of England uses tools, including interest rates, to help keep the pace of inflation in check.
Since Russia’s invasion of Ukraine, rates have been elevated to help keep a lid on price growth.
The prospect of a fresh energy-led lift to inflation means the Bank, which had been expected to cut the Bank rate from 3.75% to 3.5% next week, is now widely predicted to hold off.
LSEG data shows markets are currently almost pricing in a single increase by the end of the year instead.
What effects has this had?
We’ve seen fixed-rate mortgage deals pulled and repriced higher, reflecting that shift in sentiment over interest rate prospects.
Data from Moneyfacts on Tuesday showed that the average five-year fixed rate had gone above 5% for the first time since November, and stood at its highest since 20 October at 5.03%.
Lending costs for banks themselves have risen on the back of the market mayhem, alongside government borrowing costs.
What about pensions and investments?
Private pension values and vehicles such as stocks and shares isas have taken an inevitable hit from the turmoil.
The FTSE 100 may be down 4.6% in the month to date but it remains 5% up on where it started the year.
The more domestically-focused FTSE 250 is just clinging on to a gain for 2026 as a whole.
Lale Akoner, eToro’s global market analyst, told Sky News on the temptation to react: “For everyday investors, the key point is that geopolitical shocks often create short bursts of volatility rather than long-term damage to markets.
“Trying to react quickly to headlines can often do more harm than good. Instead, investors should focus on staying diversified and keeping a long-term perspective.
“Periods like this can actually highlight the value of having exposure across different sectors and regions, as energy stocks and defensive companies often perform better when oil prices rise and uncertainty increases.”
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What have we learned?
The war is having a real cost impact on the UK already.
Fuel, heating oil and mortgage rates are all up.
How long the war lasts will determine the path for prices ahead but even a truce will not result in any quick fix.
Yes, things like new maritime insurance premiums may come down immediately, but it will inevitably take months for shipping, energy output and deliveries to return to pre-war levels, with price growth pressures potentially taking longer to disperse through supply chains.
