Oil has never been ordinary. Since its commercial discovery in the United States in 1859, and its rise from the late nineteenth century to the first half of the twentieth as backbone of industry, transport, and energy, its price has reflected economics, politics, power, fear, scarcity, and abundance. Oil pricing thus evolved from company imposed prices to market benchmarks, contracts, and references.
In the early modern industry, from the start of the twentieth century to the 1950s, there were no spot markets or live screens. Companies, until before OPEC was founded in Baghdad on September 10-14, 1960, set the “posted price,” mainly for taxes, royalties, and long-term sales.
As oil’s importance grew, that system weakened. From the 1960s to the 1980s, pricing shifted to Brent, West Texas Intermediate, and Dubai/Oman. Crudes were priced against a benchmark, with premiums or discounts for quality, sulfur, density, delivery point, and conditions. West Texas Intermediate futures were launched in March 1983, and Brent futures in June 1988.
The Gulf: Creating a Benchmark
When the Gulf moved to the center of the oil economy, it first operated under concessions and official prices set by foreign companies. But the boom in Gulf output and exports, and the shift of demand toward Asia from the 1970s and in the 1980s and 1990s, required a pricing logic suited to the region and its crudes.
Dubai crude and Oman crude therefore emerged as benchmarks for pricing a large share of Middle Eastern exports to Asia. Pricing became a regional benchmark plus a differential for each crude. The U.S. Energy Information Administration notes that Dubai/Oman is one of the three principal international benchmarks, and that Dubai crude production had fallen to about 34,000 barrels per day in 2013.
This showed that sovereignty over oil means not only owning fields, but also managing price wisely through the right benchmark, differentials, production capacity, and market position. The Gulf thus became one of the main arenas of oil price discovery. In this context, the Oman futures contract, launched with the establishment of the Dubai Mercantile Exchange in June 2007, became the explicit and sole benchmark for the official selling prices of Oman and Dubai crude.
The UAE: Crude and Fuel
In the UAE, pricing has two dimensions: export crude and domestic fuel. On exports, the UAE has long been part of the Gulf pricing structure through grades such as Murban and Upper Zakum. As the market evolved, it pushed to establish Murban as a more independent and transparent benchmark. U.S. Energy Information Administration data show that some Emirati grades are included in the Dubai/Oman basket.
Rather than merely linking its crude to an outside benchmark, Abu Dhabi developed a futures contract for Murban, giving the market a clearer tool for price discovery and greater scope for hedging and transparency. ADNOC began the shift to forward pricing in March 2020; Murban futures officially started trading on March 29, 2021; and pricing was linked to them from June 2021, with the first expiry.
At home, the UAE liberalized fuel prices and linked them to global levels through a monthly review based on market averages plus transport, distribution, and operating costs. Gasoline and diesel were no longer permanently fixed. The decision took effect on August 1, 2015.
When Prices Rise
Oil crises redefined the relationship between the global economy and energy. In the context of the October 1973 war, and the embargo and production cut measures of that month, the price rose from about $2.90 per barrel before the embargo to $11.65 in January 1974, before the embargo was formally lifted in March 1974.
The 1979 crisis linked to the Iranian Revolution confirmed that price rises not only when oil actually becomes scarce, but also when the market fears scarcity. Strikes in Iran’s oil fields began in autumn 1978, and by January 1979 Iran’s output had fallen by about 4.8 million barrels per day, around 7 percent of global production. The Iran-Iraq War in September 1980 added a shock, with the combined production loss of the two countries estimated at about 6 percent of global output.
Price correction rarely comes through one tool alone. It may come from higher supply, the return of interrupted supplies, shrinking demand during recessions, or drawing on strategic reserves. The International Energy Agency was established in 1974 for this purpose, and coordinated collective stock releases took place in 1991, 2005, 2011, twice in 2022, and then a sixth time in March 2026.
Dates also matter in later crises. When Iraq invaded Kuwait on August 2, 1990, oil prices in the United States rose in the first week from about $22 to $30 per barrel, roughly 36 percent, while most supplies from Iraq and Kuwait, together about 4.3 million barrels per day, were immediately disrupted. Operation Desert Storm began on January 17, 1991. Years later, the 2007-2008 cycle peaked on July 3, 2008, when oil touched $145 per barrel, before collapsing to about $35.5 for dated Brent by December 23, 2008.
In modern crises, pricing has become more complex. It now involves output decisions, financial speculation, futures contracts, regulatory decisions, inventory levels, and market psychology. Price is therefore managed through several tools together: increasing supply, using strategic stocks, rearranging production quotas, absorbing the shock in local markets through temporary support or organized reviews, and waiting to see whether the global economy itself slows demand and restores balance. The International Energy Agency states that in March 2026 its member countries held more than 1.2 billion barrels of emergency reserves, in addition to about 600 million barrels of government mandated industry stocks.
Oil pricing, then, is a story of power, market, and scarcity. Globally, price began as an administrative decision controlled by major companies, then evolved into a system of market benchmarks. In the Gulf, pricing became part of the region’s rise as a center in the energy equation. In the UAE, that path matured from participation in the Gulf benchmark to building a more independent benchmark for Murban crude, alongside a disciplined domestic mechanism for fuel pricing.
