Brent Crude Oil Surges Past $116, Raising Concerns Over Another Petrol Price Hike in the UAE.
Dubai: Petrol and diesel prices in the UAE may see another increase in November after Brent crude oil surged past $116 per barrel last week. However, a drop in global oil prices on Monday has provided some relief ahead of the country’s monthly fuel price announcement.
Brent crude, the global benchmark for oil prices, slipped 1.4% to $110.12 per barrel on Monday, while US West Texas Intermediate (WTI) fell 1.8% to $101.37 per barrel.
Brent crude prices eased following Friday’s 3.1% jump, which saw the benchmark close at $116.72 per barrel. Oil has climbed sharply from below $97 at the start of October, driven by persistent concerns about Middle East supply disruptions and risks to shipping routes.
The recent surge could lead to another round of fuel price increases in the UAE this November. However, the final rates will depend on movements in global crude oil and refined petroleum product prices throughout the monthly pricing period.
What are UAE motorists currently paying?
Fuel prices in the UAE rose significantly in October, with Super 98 priced at Dh4.40 per litre, Special 95 at Dh4.28, and E-Plus 91 at Dh4.21. Diesel currently costs Dh4.80 per litre.
Compared with September, prices for all three petrol grades increased by approximately 16%, while diesel recorded an 11.6% rise.
For motorists filling a 60-litre tank, Special 95 now costs Dh256.80, up from Dh221.40 in September. A similar refill costs Dh264 for Super 98 and Dh252.60 for E-Plus 91.
A further increase of 10 fils per litre in November would add Dh6 to the cost of filling a 60-litre tank, while a 20-fils rise would mean an additional Dh12. These figures are hypothetical examples rather than forecasts of the upcoming fuel prices.
What’s driving the surge in crude oil prices?
Global oil prices have been climbing as uncertainty surrounding Middle East energy supplies continues, even as Gulf producers make progress in restoring exports.
The Strait of Hormuz remains a key concern for energy markets, with attacks targeting commercial vessels and regional infrastructure adding to fears of further disruptions.
Rising shipping expenses are also putting upward pressure on oil prices. According to Goldman Sachs, average worldwide oil transportation costs have surged from around $3 per barrel last year to more than $20, with certain Middle Eastern shipping routes seeing rates as high as $35.
The investment bank cautioned that extended disruptions to maritime trade could push crude prices above its projected baseline of $90 per barrel by the end of 2026.
Meanwhile, shipping data suggest that Gulf oil producers have successfully recovered substantial export volumes by using alternative transportation routes and modifying operations, helping reduce some of the pressure caused by supply interruptions.
Will Monday’s decline affect November fuel prices?
The drop in global crude oil prices on Monday may provide some relief from a potential fuel price increase in November. However, Brent crude continues to trade considerably higher than its levels at the beginning of October.
The UAE determines its monthly petrol and diesel prices based on international market trends rather than fluctuations recorded on any single trading day.
Therefore, overall oil price movements throughout October are likely to have a greater influence on November’s fuel rates than Monday’s decline alone.
If crude oil and refined petroleum product prices continue to fall, any potential increase could be smaller. However, if Brent remains above $110 per barrel, upward pressure on UAE fuel prices could persist.
Could UAE petrol prices break the 2022 record?
Despite October’s sharp increase, petrol prices in the UAE have yet to surpass the historic highs recorded in July 2022.
At that time, Super 98 reached Dh4.63 per litre, Special 95 climbed to Dh4.52, and E-Plus 91 stood at Dh4.44.
Currently, Super 98 and E-Plus 91 are each priced 23 fils below their respective record highs, while Special 95 remains 24 fils lower.
Any November increase exceeding these differences would take the corresponding petrol grades beyond their July 2022 peaks. However, current market conditions do not provide sufficient evidence to determine whether the upcoming revision will be that substantial.
What can UAE motorists expect in November?
Recent developments in international oil markets indicate that the possibility of higher UAE petrol and diesel prices in November remains significant, particularly following Brent crude’s strong rally throughout October.
Elevated shipping expenses and ongoing concerns about Middle East oil supplies continue to support higher crude prices.
Nevertheless, improving export volumes from Gulf producers and Monday’s decline in global oil benchmarks could help ease some of the pressure on fuel costs.
While another petrol price increase remains a possibility, motorists will have to wait until the UAE’s official fuel price announcement at the end of October to know whether prices will rise, fall, or remain unchanged in November.
