Motorists weigh impact as oil costs jump again to stay above $100 as global flows tighten
Dubai: UAE motorists are unlikely to see a sharp drop in fuel prices in May, even as global oil markets attempt to stabilise after recent spikes.
Crude has rebounded again—adding fresh upward pressure, though much of this move comes too late to significantly impact May fuel prices.
Brent crude for June delivery is now at $107.60 per barrel, up about 2.2%
The more actively traded July contract stands at $101.38, rising 2.3%
Prices have climbed from roughly $70 before the conflict, with peaks above $119 during heightened tensions
This marks a clear shift away from the earlier forecasted $90–$100 range, signalling that volatility is far from over.
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
Overall trend: no repeat of April surge, but limited relief, with current market strength unlikely to reverse May prices higher at this stage
Despite the latest spike, May pricing is effectively locked in by April averages, meaning recent gains above $100 are more likely to influence June prices rather than May.
Oil may have cooled earlier, but fresh disruptions are pushing it higher again. The Strait of Hormuz remains effectively constrained, limiting tanker movement, with around 20% of global energy supplies passing through this route. A continued naval blockade is keeping Middle East crude from reaching global markets efficiently.
At the same time, Iran has signalled it may reopen the Strait if the US lifts its blockade, but there is no clear breakthrough in negotiations. Markets are reacting to ongoing disruption rather than any resolution.
Even so, supply fears are being partly offset. Iran continues to export crude despite restrictions, with millions of barrels loaded and moved in recent days. Some shipments appear to be bypassing monitoring systems, suggesting that supply chains are strained but not entirely disrupted.
Past UAE pricing cycles show a consistent pattern:
Sharp increases are followed by partial pullbacks, not immediate reversals
Prices stabilise over one to two months before a clearer trend emerges
Diesel often lags on the downside due to tighter global supply
That points to May acting as a holding phase.
Oil remains elevated around $100–$110, as most of May’s pricing reflects earlier, lower April averages
UAE prices hold steady or edge slightly lower
Markets price in prolonged supply constraints
Diplomatic progress reduces risk premiums
The direction now depends on one factor: stability in oil flows. Focus areas:
Brent crude holding above or below the $100–$105 range
Real tanker movement through the Strait of Hormuz
April reflected the peak shock. May will show whether markets stabilise—or remain under pressure, while June pricing will more fully reflect the latest oil market rebound.
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