Petrol prices in the UAE are expected to increase in July, following a sharp rise in global oil prices driven by renewed geopolitical tensions in the Middle East. Industry observers point to the Israel-Iran conflict and subsequent U.S. airstrikes on Iranian nuclear facilities as key factors behind the recent oil price spike.
Brent crude, the global benchmark, surged to nearly $80 per barrel earlier this month, up from the mid-$60s in May. The average closing price for Brent in June was approximately $69.87, compared to $63.60 in the previous month.
In the UAE, petrol prices remained unchanged in June, with Super 98 retailing at Dh2.58 per litre, Special 95 at Dh2.47, and E-Plus 91 at Dh2.39. However, given the global price trends, motorists may see an upward revision when the UAE Fuel Price Committee announces its decision for July next week.
Since deregulating fuel prices in 2015, the UAE adjusts retail petrol prices monthly in line with global oil market movements. The policy aims to reflect real-time market dynamics and reduce the burden of fuel subsidies on public finances.
Despite the recent jump in oil prices, analysts suggest the surge may be short-lived if geopolitical tensions ease. Ipek Ozkardeskaya, senior analyst at Swissquote Bank, noted that while the market is reacting to regional conflict, underlying fundamentals point toward softer prices.
“Global demand prospects are weakening due to trade uncertainties, while supply is ample — thanks to faster production restoration from Opec+,” Ozkardeskaya said. She also highlighted Russia’s openness to increasing output at the upcoming Opec+ meeting on July 6, which could place downward pressure on prices.
“If Middle East tensions are truly done and dusted, oil is more likely than not to fall back toward, or even below, the $60 per barrel level,” she added.
Until the situation stabilizes, UAE drivers may have to brace for higher fuel costs at the pump in the coming month. The official announcement on petrol prices for July is expected on Monday.
