When will UAE fuel prices return to pre-war levels? What motorists can expect

Dubai: UAE fuel prices have started moving closer to pre-conflict levels as international oil markets stabilise 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 point 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.

Global oil markets have become more stable in recent weeks, although volatility remains higher than before the conflict.

Oil prices fell more than 6% on Monday after US President Donald Trump said he was preparing for new talks with Iran aimed at ending the Middle East conflict. On Tuesday, Brent crude rebounded by nearly 2% to around $85 a barrel, partially recovering the previous session's losses.

As expectations of renewed diplomatic engagement eased immediate concerns over global oil supplies, confidence grew that energy markets were gradually moving beyond the severe supply disruptions seen earlier this year.

The outlook will largely depend on whether recent improvements in global energy markets continue.

Brent crude has already fallen significantly from the highs recorded earlier this year. For lower crude prices to be reflected more fully in UAE fuel prices, they will need to remain at lower levels long enough to influence the monthly averages used for pricing.

The latest OPEC+ production increase is expected to add more oil to international markets. Higher production, together with recovering exports, would help ease pressure on global crude prices.

President Trump said the latest discussions would include the Strait of Hormuz, through which around 20% of global seaborne oil trade passes. Any sustained improvement in shipping conditions through the route would support global energy supplies and help reduce price volatility.

While the overall direction has become more favourable, 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 normalisation in global crude prices.

The recent decline in oil prices points to a more balanced global energy market after months of exceptional volatility, although uncertainty remains.

The UAE's market-linked fuel pricing mechanism will continue to reflect these international trends, with sustained changes in crude prices gradually feeding through to local pump prices.

If oil prices continue easing, OPEC+ production increases take effect and stability improves across key Gulf shipping routes, UAE fuel prices could move progressively closer to pre-conflict levels over the coming months.

Brent's movement between $72 and $102 a barrel over the past month underscores how quickly sentiment can shift as geopolitical developments unfold. As a result, the pace of further fuel price reductions will depend on sustained improvements in global supply conditions rather than short-term swings in crude prices.