Oil price surge continues, with no end in sight: How October's fuel prices could be affected - IOL
International oil prices have surged to four-month highs.
International oil prices climbed sharply on Monday, with Brent crude surging past the $107 mark as escalating tensions in the Middle East fuelled fears of disruptions to global energy supplies.
According to AFP, Brent crude for November delivery rose 2.8% to $107.54 a barrel, while US benchmark West Texas Intermediate for October gained 2.3% to reach $102.34.
Brent now sits at a four-month high after gaining 9% last week, when it broke above the $100 threshold for the first time since July.
According to AFP, the market remains firmly focused on the Middle East, where fresh security concerns threatened key export routes.
Saudi Arabia temporarily shut its East-West pipeline after drone attacks in the area, while a merchant vessel was struck in the Strait of Hormuz on Sunday, killing one person and injuring three others, Iranian authorities reported.
While the Strait was free to transit before the war started, Iran now requires vessels to obtain permission before crossing and is also considering imposing service fees. Ships that do not comply are regularly targeted by Iranian strikes, adding to the uncertainty surrounding global oil supply.
Furthermore, Oman has postponed talks between Iran and Gulf states on the future of the strategic waterway.
The oil price volatility makes it difficult to accurately predict October's fuel price outlook. However, the latest intel from the Central Energy Fund points to petrol price increases of up to R2.29 next month, while diesel is looking poised to go up by at least R2.22.
Record petrol and diesel prices for October are a near certainty, with the latest projections implying that 95 Unleaded petrol could rise to around R28.19 at the coast and R29.21 in Gauteng, comfortably surpassing the previous records of R27.19 and R28.06. The wholesale price of diesel, meanwhile, will rise to at least R31.76, comfortably above its previous high of R30.62.
This will follow a steep September increase, when both grades of petrol rose by R1.34 a litre and diesel increased by between R2.94 and R3.15.
Last week, US President Donald Trump predicted that the war with Iran would end immediately after the November 3 midterm elections. He argued that Tehran is prolonging the conflict in order to influence the vote, and said that fuel prices would therefore not fall before then.
"The forecast deserves scepticism, given that when the campaign began on 28 February, the expectation was that it would only last for a few weeks, but the market now has a political date, attached to a military escalation that has lasted for eight weeks in which no de-escalation has been sought," said Bianca Botes, managing director at Citadel Global.
