Oil at $100: What It Actually Costs Your Firm

Brent crude rose more than 6% on Thursday to hit $100 a barrel for the first time since May, as the war in the Middle East continues to escalate. For UK trades and construction businesses, that's not a headline — it's a line item on your next invoice.

What it means for your margin

Fuel is the first place this shows up. Diesel pump prices track crude with a lag of days, not weeks. Plant hire firms and haulage suppliers move faster — many have surcharge clauses that trigger automatically when crude moves this much in a week.

Worked example: take a five-van trades business doing 15,000 miles a year per van at 35mpg. That's roughly 1,950 litres of diesel per van annually. A 6p per litre rise — a realistic pass-through from a move like this — adds about £117 per van per year, or £585 across the fleet. Add a plant hire fuel surcharge of 3–5% on a £20,000 annual hire spend and you're looking at another £600–£1,000. None of that was in the quote you gave a client three weeks ago.

The bigger risk is quotes and fixed-price contracts signed before the spike. If your terms don't include a fuel or materials escalation clause, you absorb the increase — and on a job with a 10% margin, a £1,500 swing in fuel and plant costs can wipe out most of the profit on a mid-sized contract.

What to do this month

• Check every live quote and contract for a fuel or materials escalation clause — add one if it's missing.
• Ask your plant hire and haulage suppliers directly whether a surcharge has been applied or is coming.
• Re-price any quotes still open from before this week using current diesel and hire rates, not last month's.
• If you run a fleet, track actual litres used per job so you can prove the cost when clients push back on price rises.

None of this needs software or a consultant. It needs someone in the business to open the supplier contracts this week and check the numbers before the next invoice lands.