A drop in UAE fuel prices is expected, but it may be slower than anticipated by motorists.
Dubai: After four consecutive months of rising fuel prices, many UAE motorists are hoping that relief is finally on the horizon.
Early signs suggest global oil markets are beginning to cool. Brent crude, the international benchmark, is currently trading at around $97 a barrel, down from the $110–$120 range seen earlier this year, when disruptions to Gulf shipping routes pushed energy prices sharply higher.
However, economists caution that a substantial drop in fuel prices may still be some way off. The UAE increased petrol prices again in June, with Super 98 rising to Dh3.95 per litre, Special 95 to Dh3.83, and E-Plus 91 to Dh3.76. Diesel, however, edged down to Dh4.33 per litre after hitting higher levels in recent months.
For motorists, this means fuel prices remain significantly higher than at the start of the year. Super 98 has risen from Dh2.45 per litre in February to Dh3.95 in June — an increase of more than 61% in just four months.
For a typical driver filling a 60-litre tank, that translates to about Dh237 today compared to Dh147 in February — roughly Dh90 more per refuel.
Why prices remain high
The primary factor is oil. While crude prices have eased from recent highs, they are still elevated due to ongoing uncertainty over the conflict involving Iran and the future of shipping through the Strait of Hormuz.
The waterway accounts for around 20% of global oil flows, making it one of the world’s most critical energy corridors.
However, recent optimism over US–Iran negotiations and ceasefire efforts has helped push oil prices below $100 a barrel. Markets are increasingly betting that a diplomatic breakthrough could eventually restore normal shipping flows.
This has helped ease some of the panic buying that pushed crude prices sharply higher earlier this year. However, economists caution that any decline in oil prices is likely to be gradual rather than rapid.
Slower path to lower prices
Gita Gopinath, formerly the IMF’s Chief Economist, said oil prices are unlikely to return quickly to pre-conflict levels.
“We are not going to see the price of oil come down all the way very quickly,” she said. “It’s going to take probably till the middle of next year for oil to come back to say $70 or $75 a barrel.” She added, “There is going to be an effect lasting into next year.”
This timeline is significant for UAE motorists, as fuel prices are directly tied to global oil movements through the country’s monthly fuel pricing mechanism.
If crude oil stays in the $90–$100 per barrel range, fuel prices may stabilise but are unlikely to see any sharp declines. A return to the $70–$75 range would, however, create far stronger conditions for meaningful reductions at the pump.
What could happen next?
Based on current oil market trends, the most likely outcome is a gradual easing in fuel prices rather than a sharp decline. If Brent crude remains below $100 a barrel and geopolitical tensions continue to ease, UAE fuel prices could see modest downward adjustments in the coming months.
The speed of any reduction will depend on how quickly global oil supply conditions stabilise and whether shipping activity through the Strait of Hormuz returns to normal levels.
Because UAE fuel prices are based on monthly average oil prices rather than day-to-day movements, changes in crude markets typically take time to reflect at the pump.
This means that even if oil prices decline further this month, motorists may have to wait several pricing cycles before seeing a noticeable reduction in fuel costs.
Risk that could delay relief
Economists also caution against assuming the current easing trend will last. Gita Gopinath warned that markets may be underestimating the risk of a prolonged disruption.
“If this continues for another month, we’re looking at oil prices that could go up to like $120 and $140 a barrel and could stay there for much longer,” she said. Such a scenario would likely push fuel prices higher again and add fresh pressure on global inflation.
The warning is also reflected by the Organisation for Economic Co-operation and Development. The 38-member intergovernmental body said the global economy remains highly vulnerable to prolonged energy disruptions. “The longer the disruption lasts, the greater the economic, but also the social cost of this crisis,” said Stefano Scarpetta.
The OECD projects that global growth could slow to 2.8% in 2026 if Gulf oil and gas exports return to pre-conflict levels later this year. However, if disruptions persist into 2027, growth could fall further to around 2.1%, with some economies potentially facing recession risks.
When will motorists get relief?
The timing of relief depends largely on one key factor: oil prices. If crude continues to ease and stays below $100 a barrel, UAE motorists could see fuel prices stabilise and gradually decline in the coming months.
However, based on current forecasts from economists and international organisations, a return to the much lower fuel prices seen at the beginning of 2026 appears unlikely in the near term.
For now, the sharp spikes in fuel prices seem to have eased. The next phase is more likely to be a period of gradual cooling rather than a rapid decline.
