Oil prices may surge to over $100 a barrel due to the Israel-Iran conflict, even though there is plentiful spare capacity and ample storage, analysts said. Crude oil rose as much as 14 per cent after Israel launched a major and unprecedented attack on Iran on Friday morning, targeting nuclear and military facilities. On the weekend, the WTI and Brent prices closed at $72.98 and $74.23 per barrel, up 7.26 and 7.02 per cent, respectively.
If oil prices continue to rise or remain consistently higher, this means UAE motorists will have to shell out more next month. In June, the UAE maintained the oil prices unchanged, with Super 98, Special 95, and E-Plus pricing at Dh2.58, Dh2.47, and Dh2.39 per litre, respectively. In October 2024, Israel launched a major strike on Iranian nuclear facilities. At the time, Iran responded with drone attacks that were mostly intercepted and perceived more as a warning than a retaliation.
As Iran and Israel are at full-scale war, Naeem Aslam, an analyst at Zaye Capital, said, “Markets are staring down a barrel of volatility. “Oil’s surged up to 14 per cent on Israel’s strikes; prices could breach $120 if energy infrastructure gets hit. Markets are on edge – any disruption in this oil-rich region could send crude soaring further,” he added.
Norbert Ruecker, head of economics and next-generation research at Julius Baer, stated that oil serves as “the fever gauge” for such conflicts, leading to corresponding price spikes. Analysts added that oil supply concerns are intensifying, bringing the risk of a Strait of Hormuz closure—a key choke point for oil trade—into sharper focus. Ole Hansen, head of commodity strategy at Saxo Bank, said even a brief disruption of the Strait of Hormuz, the world’s most critical oil transit chokepoint that sees more than 20 million barrels of crude pass through daily, could trigger a sharp price spike, with some analysts warning of a potential move toward $100 per barrel in a worst-case scenario.
