The business case for switching to greener and more fuel efficient fleets was further cemented today as oil prices again reached record highs on the back of worsening tensions with Iran, moderate optimism on the US economy, and agreement of the latest Greek bailout.

The cost of a barrel of Brent crude reached $121.92 last night, setting a new record for sterling oil prices of £77.77.

The price climbed further today to a high of $124.09 per barrel, setting a nine-month record in dollar prices, before pulling back to around $123 a barrel.

Concerns over continuing tensions with Iran outweighed fears over the health of the eurozone, with analysts suggesting that some traders were hoarding oil contracts in case of further conflict with Iran.

A team of UN nuclear inspectors left the country earlier this month, declaring themselves disappointed with their trip, while media reports suggested that Japan could cut its imports of oil from Iran by more than had been expected.

EU countries are also expected to tighten oil sanctions against the Middle East state this year, further raising fears over oil supplies.

The latest high comes just days after diesel prices in the UK hit a new record, and will further increase pressure on Chancellor George Osborne not to increase fuel duty in the upcoming budget.

However, on-going oil price volatility is likely to further fuel calls for the government to accelerate efforts to reduce the UK’s reliance on imported fossil fuels.

The latest record high will also improve the competitiveness and payback period for more fuel efficient vehicles, curbing their running costs when compared to conventional vehicles, while simultaneously strengthening the business case for biofuel and electric vehicle firms.

Earlier this week, Transport Secretary Justine Greening urged businesses to take advantage of new government grants supporting electric vans, arguing that they enjoy significantly lower running costs than conventional vans.