Fast-rising oil prices worldwide can push up UAE fuel prices too: Here's how

Dubai: Oil prices have spiked sharply after Israel’s recent airstrikes on Iran — and for UAE residents, that could signal higher fuel costs ahead.

After global oil prices rose as much as 7% in a matter of hours on Friday and Brent crude jumped over 13% last week, analysts now warn prices could climb even higher this week as markets react to the possibility of wider conflict in the Middle East.

If tensions escalate further in the weeks to come, UAE fuel prices may face fresh upward pressure, with global shipping routes affected and potentially looking for alternates.

The latest attack has brought back a wave of geopolitical uncertainty, just when global markets were hoping for stability. The big concern? A disruption in oil flows through the Strait of Hormuz — a vital waterway for Gulf oil exports, including from the UAE.

Nearly 20 million barrels of oil pass through this narrow channel each day. If tankers are delayed or re-routed due to military activity, even briefly, oil prices could skyrocket.

Analysts say Brent crude could hit $90 a barrel in the short term, especially if Iran responds aggressively. If actual supply is hit — say through damage to oil infrastructure or export terminals — we could even see $120 or more per barrel, according to multiple global estimates.

Some forecasts mention that Iran exports over 2 million barrels daily, and if those are halted, it could instantly tighten global supply. One extreme scenario suggests that if the Strait of Hormuz is blocked, up to 14 million barrels per day of exports could be affected — enough to shake markets significantly.

The UAE reviews and adjusts petrol prices every month based on global oil movements. If oil continues spiking this week and the next, July’s fuel prices may be noticeably higher, affecting household budgets, ride-hailing fares, delivery charges, and air tickets. (Check latest UAE fuel prices here.)

Even though the US wasn't involved in the strike, markets are now on edge about how Iran will respond. Any retaliation targeting oil routes or allies in the region could worsen the situation.

Experts also say this conflict comes at a delicate time for global inflation. If oil prices stay high, countries may face higher consumer prices, leading to tougher decisions by central banks worldwide — including those setting interest rates this week.

Some analysts note that despite the panic, OPEC+ (which includes the UAE and Saudi Arabia) still has spare supply that can be activated if needed. Emergency oil reserves may also be released to calm the market. But none of that may matter if geopolitical tensions remain high and markets stay jittery.

In the coming days, expect oil prices to remain volatile — and possibly edge higher as investors brace for more headlines from the region. Fuel costs may remain unpredictable for now.

Unless there’s clear de-escalation, UAE consumers and businesses should prepare for a short-term stretch of elevated oil and petrol prices, with wider knock-on effects on logistics and transport.