UAE Fuel Prices Poised for November Increase Amidst Lingering Market Uncertainty

Analysts predict that petrol prices in the UAE will likely see another rise in November. This is due to the fact that the recovery in Middle East oil supplies is not immediately leading to a return to normalcy in the energy market.

Following three consecutive months of price hikes in October, driven by persistent uncertainty surrounding a potential US-Iran truce, oil prices have also experienced a significant surge this month. Attacks by Yemen's Iran-aligned Houthi rebels on Saudi Arabia have contributed to crude oil reaching five-month highs this week. On Friday, Brent crude was trading around the $115 mark, with West Texas Intermediate also seeing an increase.

Jordan Lawrence, CEO and co-founder of Damisa, a London-based financial services firm, stated that with Brent crude exceeding September's peak this month, "the risk of another increase in UAE petrol prices for November is elevated." He further explained to The National that October's fuel rates had already risen substantially, and the committee's end-of-month review will factor in the full month's international averages, refined-product prices, and costs.

Ship tracking data indicates that oil movements through the Strait of Hormuz, which previously accounted for a fifth of global energy exports before the war, are gradually increasing. US Energy Secretary Chris Wright recently noted that up to 14 million barrels of oil per day are transiting the strait, with Gulf crude flows recovering to between 80 and 90 percent of pre-war levels.

However, George Pavel, general manager at Naga.com Middle East, a capital markets firm in Abu Dhabi's ADGM, cautioned that the recovery in Middle East oil exports in October does not necessarily signify a return to market normality. "Ongoing threats to shipping and persistent uncertainty around the Strait of Hormuz continue to support prices," he told The National. "The key change is that the market is increasingly pricing the risk of further disruptions, instead of simply assessing current production and export volumes." Pavel added that even with recovered supply flows, the cost and reliability of transporting crude remain significant constraints. He suggested that prices could retreat quickly if exports remain resilient and diplomatic progress reduces shipping threats. "The next decisive factor will be whether October's security risks translate into lasting physical supply losses."

Ahmad Assiri, a research strategist at financial services firm Pepperstone, pointed out that even if oil continues to reach markets via the Strait of Hormuz, uncertainty about future delivery reliability compels buyers to pay a substantial premium for now. "Many buyers have become price-insensitive due to elevated uncertainty... a diplomatic breakthrough could provide some ease and a pullback," he told The National. "However, a sustained decline would require confidence that infrastructure and shipping routes can operate securely, which is a hard thing to see in the current environment." Assiri concluded, "October has strengthened the conviction that the geopolitical premium will be persistent, and this in turn makes the eventual growth and inflation consequences more concerning."