Global oil prices climbed more than 1% on Friday, with Brent crude rising above $114 a barrel to reach a five-month high, raising the prospect of another increase in UAE petrol prices when retail rates are announced for November.
Brent crude was trading at $114.40 a barrel on Friday afternoon, up 1.11%, while US West Texas Intermediate (WTI) rose 1.7% to $101.20, crossing the $100 mark amid concerns over global supplies.
The rise follows a rally on Thursday, when Brent settled about 4% higher at $113.17 a barrel, its highest closing level since May. The increase came after reports that the United States and Israel were considering additional military action against Iran, adding to concerns about potential disruptions to oil supplies from the Middle East.
Oil prices have a direct bearing on petrol costs in the UAE, where domestic fuel prices have been linked to international market rates since the government deregulated prices in 2015. The UAE Fuel Price Committee reviews retail rates at the end of each month.
In October, petrol prices in the country exceeded Dh4 per litre for the first time in more than four years. Super 98 petrol rose to Dh4.40 per litre from Dh3.80 in September, while Special 95 increased to Dh4.28 from Dh3.69. E-Plus 91 climbed to Dh4.21 per litre, compared with Dh3.61 the previous month.
If international crude prices remain elevated or rise further next week, UAE motorists could face another increase in November.
The Fuel Price Committee is scheduled to announce the new rates on October 31. The decision will also determine whether petrol prices approach or exceed the record levels reached during the global energy market turmoil of 2022.
In July that year, Super 98 petrol reached Dh4.63 per litre, Special 95 climbed to Dh4.52, and E-Plus 91 hit Dh4.44.
Middle East tensions support oil prices
Analysts said escalating geopolitical risks have increased concerns about potential supply disruptions and added a risk premium to crude prices.
Vijay Valecha, chief investment officer at Century Financial, pointed to renewed Houthi attacks on Saudi Arabia, including a reported drone strike on Saudi Aramco’s Shaybah oil field. The US decision to withdraw some diplomatic personnel and their families from Saudi Arabia has also heightened uncertainty, he said.
“Speculation surrounding potential US-Israeli strikes on Iran and Tehran’s reported attacks on tankers transiting the Strait of Hormuz are further supporting prices by increasing the geopolitical risk premium,” Valecha added.
The Strait of Hormuz is a critical route for global oil shipments, making any threat to tanker traffic a concern for energy markets.
With tensions continuing across the region, traders are monitoring developments for signs of further disruption. The direction of crude prices over the coming days will be a key factor in determining the UAE’s November petrol rates, although the final decision rests with the Fuel Price Committee.
