We are less than one month into 2026, and commodity markets are already in flux; one stand-out example of this currently is the tumultuous global oil industry. However, while headlines focus on global superpowers, the real-world impact of fuel price fluctuations is felt on the factory floors, building sites, and farmyards of Britain.
For small and medium-sized enterprises (SMEs) in haulage, agriculture, and construction, the price at the pump is not just a “throwaway” expense, but a big cost contributor. So, when supply and demand flows become turbulent, it’s important to protect your profit margins and limit the threat of rising costs to your business.
At Attara, we believe that understanding the why behind this volatility is the first step towards protecting your bottom line.
What are the international and domestic forces impacting oil prices right now?
On paper, oil prices look favourable, with global oversupply pushing prices down overall. Yet, recent geopolitical volatility serves as a critical reminder that sudden cost spikes can erode business margins overnight and generate uncertainty for tomorrow.
This year, the Russo-Ukrainian conflict continues to disrupt the oil industry. Recent drone strikes on Russian energy infrastructure have not only hindered Moscow’s export operations but have also created collateral damage for international partners, generating fears of sudden physical shortages for businesses reliant on imported crude oil.
Beyond the Black Sea, we also saw the market’s underlying vulnerability during recent unrest in Iran; driven by soaring inflation and internal economic pressure, the resulting instability triggered a 9% price surge in just one week. The situation has highlighted the fragility of the Strait of Hormuz, the transit route north of Iran’s southern coast, which houses nearly one-fourth of global seaborne oil.
Any further unrest that leads to physical blockades or new US-Iran trade restrictions would have immediate ripple effects on global supply chains. This would drive wholesale energy prices and domestic inflation up for British businesses in manufacturing and logistics.
Adding another layer of complexity is the United States’ potential to oversee the world’s largest oil reserves in Venezuela. The British oil industry should be wary of how this strategy will influence changes in global trading relationships, especially considering that Trump has already completed his first sale of Venezuelan supplies. However, Venezuela only contributed to 1% of world oil production last year, so significant infrastructural investment will be required to lift this figure substantially.
The country’s political tensions further reduce its attractiveness as an investment opportunity, meaning that Venezuela does not stand as a strong global competitor currently and may not rock oil prices too drastically.
Nevertheless, the UK’s domestic strategy, combined with long-term global uncertainty, restricts the ability of British businesses trading oil to thrive.
While Energy Secretary Ed Miliband banned new oil and gas drilling in 2024, Norway is reopening ‘dead’ fields using new technology. This ultimately cedes our energy independence as a country to global competitors, particularly since the pausing or cancelling of nearly 60 low-carbon hydrogen projects by giants like BP and ExxonMobil.
As Norway moves to dominate the North Sea, the UK is on track to be 80% dependent on imports by 2035. This is detrimental to the health of British businesses in oil production, and leaves those in the haulage and construction sectors vulnerable to the exact fuel cost spikes and supply chain shocks we are seeing play out worldwide.
The impacts of oil volatility subtly bleed into the agricultural industry too, significantly through fertiliser costs.
Every dollar added to the price of Brent crude increases the cost of shipping, trucking, and spreading the product. For the UK farming industry, which is already under pressure, these rising nutrient costs act as a direct hit to food production margins and, ultimately, the price of goods on the shelf.
As a result, entering into fixed-price contracts becomes a dangerous gamble for SMEs in the commodities sector.
How can you protect your business?
In a market defined by opaque supply chains and constant geopolitical flare-ups, simply absorbing rising costs is no longer a viable strategy for long-term growth.
To survive and thrive, businesses must move from a reactive stance to a proactive one.
Strategic financial solutions, such as Caps and Swaps, are no longer the exclusive domain of giants like BP.
These tools are now fully accessible to SMEs nationwide, allowing firms to ‘lock in’ fuel prices months in advance. This ensures that even if global conflict sends prices soaring, your operating costs remain predictable and protected.
In the current climate, leaving any stone unturned in your business plan is a risk you cannot afford to take. A calculated, proactive plan is the only way to smooth the path ahead. If your margins are feeling the impacts of global oil volatility, it is time to transform that uncertainty into managed risk. Our specialists can help you integrate macro-risk assessment into your planning to safeguard your bottom line.Contact us or visit our Explore Zone today to secure your path ahead.
