UAE Fuel Prices Drop 30% From Conflict Peak
UAE fuel prices have started moving closer to pre-conflict levels as international oil markets stabilize after months of exceptional volatility triggered by the Middle East conflict. Brent crude has fallen by around 30% from its conflict peak above $120 a barrel, improving expectations that UAE fuel prices could continue moderating if lower oil prices are sustained.
Despite the recent decline, Brent remains about 15%-20% above the low-$70 range seen before the conflict began, reflecting continued uncertainty over Gulf energy supplies and the Strait of Hormuz, through which around 20% of global seaborne oil trade passes. For UAE motorists, the easing in oil prices points to improving market conditions, although the pace of further fuel price reductions will continue to depend largely on how international oil markets evolve.
The UAE Fuel Price Committee‘s August prices still reflect higher global oil prices, with Super 98 at Dh3.60, Special 95 at Dh3.49, E-Plus 91 at Dh3.41 and diesel at Dh3.80, compared with Dh2.45, Dh2.33, Dh2.27 and Dh2.72 respectively in February. The comparison reflects the sharp increase in international crude prices during the conflict, followed by the gradual moderation seen over recent weeks.
The UAE follows a market-linked fuel pricing mechanism introduced in 2015, under which retail fuel prices are reviewed each month using average international crude oil and refined fuel prices. As a result, local pump prices reflect broader market averages rather than daily fluctuations in crude oil prices. This approach means sustained increases or declines in international oil prices are gradually reflected in subsequent monthly fuel price revisions.
For UAE fuel prices to return to pre-conflict levels, several factors need to come into play. Firstly, oil prices need to remain lower, with Brent crude already falling significantly from the highs recorded earlier this year. Secondly, global supply needs to keep improving, with the latest OPEC+ production increase expected to add more oil to international markets. Lastly, greater stability around the Strait of Hormuz is crucial, with any sustained improvement in shipping conditions through the route supporting global energy supplies and helping reduce price volatility.
While the overall direction has become more favorable, uncertainty remains. Iran has denied that negotiations with the United States are under way, despite President Trump’s comments. Oil markets also continue to react quickly to developments affecting Gulf shipping and regional energy infrastructure. Any renewed disruption to exports or shipping routes could slow the pace of normalization in global crude prices.
In the coming months, UAE motorists can expect a more balanced global energy market, although uncertainty remains. The UAE’s market-linked fuel pricing mechanism will continue to reflect these international market trends, with further fuel price reductions possible if lower crude oil averages and stable Gulf shipping routes are sustained.
Here are some key questions and answers about the current state of UAE fuel prices:
