How will fuel costs change in the United Arab Emirates?
The UAE sets fuel prices based on the average oil price over the previous month, creating a lag effect:
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April prices reflected the sharp increase in March
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May prices are based on April averages, which were lower than current levels
Possible direction for May:
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Gasoline prices: stable or slightly lower
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Oil: likely to remain elevated
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Overall trend: no repeat of April’s rise, but limited relief, with current market strength unlikely to reverse May’s higher prices at this stage
Despite oil nearing $120 again, the May price is effectively locked out of April averages, meaning the current rise will have a stronger impact on June prices.
Why won’t prices fall faster?
Oil had eased earlier, but recent developments have reversed this trend. The Strait of Hormuz is now effectively restricted, cutting off the movement of tankers through a route that carries about 20% of global oil supplies. This has tightened global flows and raised prices significantly.
There is little clarity about the solution. While Iran has linked the reopening of the Straits to changes in US policy, there are no signs of progress. Markets are reacting to supply disruptions rather than diplomatic progress.
At the same time, supply risks are not absolute. Iran has continued to export crude oil despite the restrictions, with shipments still finding ways to move around the region. This suggests that the flows are interrupted but not completely stopped.
What happens after a stroke
Past price cycles in the UAE show a consistent pattern:
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Sharp increases are followed by partial pullbacks, not immediate returns
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Prices stabilize over one to two months before a clearer trend emerges
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Oil often remains in decline due to tighter global supply
This shows that May acts as a holding phase, even as markets heat up again.
Scenarios for fuel prices in May
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Transportation through Hormuz has been normalized
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Diplomatic progress reduces supply risks
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Oil retreats from current levels
What drivers should look for
Direction now depends on how steady the oil flow is and how long the power outages last. Areas of focus:
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If Brent holds close to $110-120
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Developments around the Strait of Hormuz
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Any progress in geopolitical negotiations
April reflected the climactic blow. May will show whether markets stabilize or remain under pressure, while the June price will more fully reflect the recent recovery of the oil market.
Justin is a seasoned personal finance author and business journalist with over a decade of experience. He makes it his mission to break down complex financial topics and make them clear, relatable, and relevant—helping everyday readers confidently navigate today’s economy. Before returning to his Middle Eastern roots, where he was born and raised, Justin worked as a business correspondent at Reuters, reporting on stocks and economic trends in both the Middle East and Asia-Pacific regions.
