Rising tensions between Israel and Islamic extremists Hezbollah in Lebanon have led to fighting between the two countries.
Fears that Iran and Syria could become involved have sent oil prices rocketing to $78 a barrel and UK fuel prices have hit a record average of 97.02p a litre.
Experts predict that the average pump price will hit £1 a litre in the next few weeks. Reports suggest that drivers are now paying on average £20 more a month for fuel than at the start of the year.
Brendan McLoughlin, co-founder of petrolprices.com, said: ‘It tends to take a few weeks for oil prices to filter through to the pumps. Unfortunately that means we are expecting steep rises in the next few weeks.’
The Middle East produces one third of the world’s oil and holds two-thirds of its untapped resources. The rising price of oil has also been affected by instability in African oil-producing areas such as Nigeria.
There is a growing fear among traders of a repeat of the 1970s oil embargo during the 1973 Arab-Israeli war.
Ruth Bridger, a petrol price analyst at the AA Motoring Trust, said: ‘If oil prices edge over the 80 dollars a barrel mark, we will certainly see diesel go over £1 a litre and petrol will follow later in the summer.
‘There’s certainly more cost to come through the system.
‘This new record price comes right at the start of the holiday season and this is when the cost of petrol will really hurt drivers.’
Mike Waters, head of market analysis at fuel card supplier Arval, said: ‘Recent events in Israel and Lebanon underline how the global oil market remains sensitive to geo-political concerns. Now, more than ever before, it is imperative that fleets have robust fuel management policies.
‘Systems should be established to monitor driver purchasing patterns as well as vehicle performance. Gaining a more accurate understanding can ensure the impact of rising fuel prices remains a manageable business overhead, not a crippling cost.’