Oil surged above $110–$120 in March, before easing into the current $90–$100 range.
UAE motorists are unlikely to see a sharp drop in fuel prices in May, even as global oil markets ease from March’s peak.
Crude has pulled back—but not enough to signal a full correction.
- Brent crude is now trading close to $99.29 per barrel, up 0.82% on the day
- US crude stands at $90.71, rising 1.15%
- Both benchmarks gained around 3% in the previous session, showing renewed upward pressure
This follows a period where oil surged above $110–$120 in March, before easing into the current $90–$100 range.
How UAE fuel costs will change
The UAE sets fuel prices based on the average oil price over the previous month. That creates a lag effect:
- April prices reflected March’s sharp spike
- May prices will reflect April’s lower—but still elevated—average
- Petrol prices: stable or slightly lower
- Diesel: likely to remain elevated
- Overall trend: no repeat of April surge, but limited relief
In short, the market is shifting from crisis pricing to stabilisation, not a full reset or reversal.
Why prices are not falling faster
Oil may have cooled from its peak, but underlying risks remain firmly in place.
- The Strait of Hormuz remains constrained, with minimal vessel movement reported
- Around 20% of global energy supplies pass through this route
- A continued naval blockade is limiting supply flows
- The US has indefinitely extended a ceasefire with Iran to allow negotiations
- Markets remain cautious, pricing in uncertainty rather than resolution
- Oil prices have already started edging higher again toward the $100 mark
This combination—partial de-escalation but ongoing disruption—is keeping prices supported.
What happens after a spike
Past UAE pricing cycles show a consistent pattern:
- Sharp increases are usually followed by partial pullbacks, not immediate reversals
- Prices tend to stabilise over one to two months before a clearer trend emerges
- Diesel often lags on the downside due to tighter global supply
That suggests May is more likely to be a holding phase, rather than a correction.
Scenarios for May fuel prices
Most likely prices:
- Oil fluctuates between $90–$100
- UAE prices hold steady or edge slightly lower
When can costs rise:
- Supply disruptions persist or worsen
- Oil moves back above $100
- UAE prices remain elevated
When can costs drop:
- Strait of Hormuz reopens more fully
- Supply normalises
- Price relief becomes more visible in June rather than May
What motorists should watch
The direction is now tied to one variable: stability in global oil flows. So the focus will be on:
- Movement in Brent crude around the $90–$100 range
- Developments in US-Iran negotiations
- Shipping activity through the Strait of Hormuz
April reflected the peak of disruption. May will show whether markets are stabilising—or preparing for another move higher.
Source: Gulfnews
