Olive oil prices are moving to record highs, driving consumers and businesses to alternative cooking oils like sunflower and rapeseed, as dry weather in Spain and Italy slashes output for the luxury food.

Prices for Andalusian olive oil in January reached an all time high of 5.43 euros a kilogram ($5.80), according to research firm Mintec, with Italian and Greek varieties also moving to record levels too. A year ago, prices stood at roughly EUR3.37 a kilo.

Most of the high prices have been driven by the weather.

Last year, Spain--the world's largest producer of olive oil--saw exceptionally dry conditions preventing crop development, with olives dropping to the floor instead of maturing into fruit from a lack of water.

Harvests are currently wrapping up but indications show that Spanish output has halved, with roughly 780,000 metric tons expected to be collected, compared to 1.5 million tons last year, according to the International Olive Council. Across Europe, output is expected to fall 33% in the 2022-23 season to 1.5 million tons, the IOC said.

"At the end of April and into May, it was too warm and flowers [on the olive trees] didn't turn into fruit and the olives dropped to the ground," said Fadrique Alvarez de Toledo y Argüelles, an olive grower based in the southwest of Spain. "Then we had an extremely dry and hot summer. That combination has made it more difficult," he added.

According to analysts, consumers are turning to alternative oils like sunflower and rapeseed oil, for which prices have nose dived in the past six months, with many looking to blend cooking oils to negate some of the cost. Sunflower oil prices have fallen 23% in the past six months on higher supplies from Ukraine, according to Mintec.

Prices for cooking oils had soared last year after exports of sunflower seeds from Ukraine stopped temporarily because of the war. They have however eased since the establishment of the United Nations-backed Black Sea Grain Initiative.

"Contracts usually last a year and they are now coming to an end and now we are seeing a huge increase [in prices]," said Kyle Holland, oilseeds and vegetable oils analyst at Mintec. "For many it is too much too fast, " he added, saying sunflower oil was the preferred alternative.

Walter Zanre, managing director of the U.K.'s largest olive oil brand Filippo Berio UK Ltd., said that "it is inevitable that U.K. consumers will buy less olive oil as a result of these substantial increases."

Panos Manuelides, managing director of British Mediterranean food retailer Odysea Ltd, said that its single-origin extra virgin olive oil sourced from Greece now retails at 15 pounds ($18.25) for a single liter, up from GBP9 at the start of last summer. Cheaper ranges have also seen similar increases, rising to GBP6 from GBP3.50 for a 500-milliliter bottle.

"We've increased [prices] throughout the year," said Mr. Manuelides. "We pushed prices through as prices were coming up but we also do try to hedge, so buying more when we think prices are good," he added.

Other factors have also contributed to raising the cost on the shelf for consumers. Last year, French glass maker Verallia SA temporarily stopped its operations in Ukraine--where many olive oil producers sourced bottles from.

Charles Carey, founder of the Oil Merchant Ltd., said that for his olive oil--which is largely sourced from Tuscany and is priced at the premium end at roughly GBP20 a liter--the higher prices and lack of supply of glass bottles has been a factor in driving up prices.

"Estate bottled prices do reflect commercial prices but not as much," he said, adding that his profit margins have been shrinking to maintain customers built up over the years.

Write to Yusuf Khan at yusuf.khan@wsj.com

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