UAE fuel prices are scheduled to rise in April as Brent crude trades above $106 a barrel, driven by supply disruptions after Iran's blockade of the Strait of Hormuz all but halted the flow of oil through the Arabian Gulf.
The Emirates will announce April prices on March 31. They are set monthly by a government committee and are linked to global oil benchmarks.
“Fuel prices in the UAE are likely to increase next month, or at the very least remain at elevated levels, primarily driven by continuing geopolitical tensions in the Middle East, particularly if no near-term de-escalation agreement is reached,” Rania Gule, senior market analyst at XS.com, said.
In March, Super 98, a high-octane premium grade used in sports cars and luxury vehicles, rose 5.7 per cent to Dh2.59 a litre.
Special 95, the standard grade for everyday passenger cars, gained 6.4 per cent to Dh2.48.
E-Plus 91, used in low-compression engines and commercial fleets including taxis, climbed 6.2 per cent to Dh2.40. Diesel rose 7.9 per cent to Dh2.72.
Prices had fallen in January and February after spiking in December, when Super 98 reached Dh2.70, Special 95 Dh2.58 and diesel Dh2.85.
Brent, the benchmark for two-thirds of the world’s seaborne crude, rose 3.8 per cent to $106.20 a barrel as of 2:03pm UAE time on Thursday. West Texas Intermediate, the US gauge, gained 3.7 per cent to $93.64.
Oil has surged since war broke out on February 28, after Iran struck energy facilities across Qatar, the UAE and Saudi Arabia in retaliation for US-Israeli strikes on Tehran that killed supreme leader Ayatollah Ali Khamenei.
Brent hit $119 a barrel in mid-March after supply outages across the region, which supplies 20 million barrels a day of oil through Hormuz, equivalent to a fifth of the world's oil.
Qatar, which accounts for a fifth of the world’s liquefied natural gas, also uses the strait exclusively to sell its fuel. Iranian targets included Qatar's Ras Laffan industrial hub, home to the world’s largest liquefaction centre, Kuwait's Mina Al Ahmadi refinery and the Shah gasfield in the UAE. The disruption has rippled well beyond the Middle East, with India, Asia's second-largest economy, facing acute fuel shortages as supply from the region is restricted.
Iranian state media reported on Wednesday evening that Tehran rejected a 15-point US ceasefire proposal, pushing prices higher. US President Donald Trump had earlier said Iran agreed not to pursue a nuclear weapon, as negotiations between the two sides continue.
“The key variable remains the Strait of Hormuz,” said Neil Crosby, assistant vice president of oil analytics at Sparta. “Until there is clear and sustained evidence that flows through the strait have normalised, the market cannot be considered stable. Even if flows resume, the system will take weeks, if not months, to return to anything resembling normal conditions.”
Mr Crosby added that restoring supply chains will take time due to the impact on oil refineries, global inventories and movement of vessels, and that oil may still be underpriced relative to the scale and duration of the disruption.
Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and Group Chief Executive of Adnoc, speaking virtually at CERAWeek by S&P Global in Houston, called the blockade “economic terrorism against every nation.”
“Weaponising the Strait of Hormuz is not an act of aggression against one nation; it's economic terrorism against every nation. No country should be allowed to hold Hormuz hostage,” Dr Al Jaber said.
Ms Gule said UAE inflation is likely to remain within a 3-to-4 per cent range despite higher fuel and transport costs. “This relatively contained impact reflects the structural strengths of the UAE economy, including its diversification, efficient infrastructure, and flexible economic policies,” she said.
