Key facts
- Oil prices hit a five-month high of $110 a barrel.
- Asian and European gas prices reached their highest levels since December 2022.
- Packaging costs, typically 5% to 15% of manufacturing cost, are affected by crude price increases.
- Global food inflation is expected to accelerate due to shipping disruptions and higher fertilizer costs.
Global oil prices have reached a five-month high of $110 a barrel, with Asian and European gas prices hitting their highest levels since December 2022. These elevated energy costs are impacting household budgets worldwide, contributing to increased prices for transportation, heating, food, clothing, and packaging.
The surge in oil prices is also exacerbating inflation and raising borrowing costs. In the UK, higher petrol and diesel costs contributed to inflation reaching its highest level since October 2025. Similarly, the Reserve Bank of Australia increased its cash rate to a 15-year high, leading to higher variable housing loan rates.
In the United States, mortgage purchase activity has weakened as 30-year mortgage rates have climbed significantly, increasing costs for potential homebuyers. Heating bills are also expected to rise substantially in regions like New York, and British households face potential increases in gas bills. The impact extends to consumer goods, as plastic prices have risen, and global food inflation is projected to accelerate further due to higher shipping and fertilizer costs.