UAE Fuel Price Outlook for March 2026: Geopolitical Tensions Threaten Recent Relief
Motorists across the United Arab Emirates are anxiously awaiting the official announcement of fuel prices for March 2026, as global oil markets present a complex and volatile picture. While February delivered welcome relief at the pump with consecutive monthly price reductions, a sharp and sustained rebound in international crude oil prices—primarily fueled by escalating tensions between the United States and Iran—now raises the strong possibility that March could see this downward trend abruptly reverse.
February's Price Relief and the Shifting Global Landscape
According to market reports, fuel became more affordable for UAE residents in February 2026. Prices for the three main gasoline grades—Super 98, Special 95, and E-Plus 91—were reduced by approximately eight to nine fils per litre. This adjustment brought the prices down to Dh2.45, Dh2.33, and Dh2.26 per litre, respectively. This marked the second consecutive monthly price cut since December, offering continued financial respite to consumers. Diesel prices were also adjusted downward during this period.
However, the global context for oil has undergone a significant transformation. Reports indicate that Brent crude oil crossed the critical threshold of $71 per barrel during February, driven largely by market fears surrounding a potential military conflict between the US and Iran. By the close of trading on a recent Tuesday, benchmark prices stood at $66.31 per barrel for Brent and $71.38 per barrel for West Texas Intermediate (WTI). The average closing price for Brent crude in February was calculated at $68.9 per barrel, a notable increase from the $63.47 average recorded in January.
Analysts: Geopolitics Now Dominates Oil Market Sentiment
Energy market analysts unanimously agree that geopolitical factors are now the primary driver of oil price movements and market sentiment. Daniel Yergin of S&P Global highlighted that oil currently carries an estimated $10 per barrel "premium" directly linked to the uncertainty and instability surrounding US-Iran relations, with Brent having touched $72.33 on February 23.
Echoing this assessment, Norbert Rücker, Head of Economics and Next Generation Research at Julius Baer, stated that the US-Iran conflict is dominating the oil market narrative. He confirmed that prices are inflated with what he described as a "decent geopolitical risk premium."
"A military clash seems inevitable," Rücker commented, "but such an escalation does not necessarily come hand-in-hand with immediate oil supply disruption, as the past years have shown on multiple occasions. More importantly, today’s oil market is very supply-resilient, thanks to ample storage, production exceeding consumption, and significant spare output capacity."
He added a longer-term perspective: "While we are unsure whether the current price bounce will top out in the high $70s or even the high $80s per barrel, we have more confidence in the view that this risk premium will eventually wane. We anticipate oil prices returning to below $60 per barrel towards the middle of the year. Amidst today’s geopolitics, we maintain a neutral market view."
Strait of Hormuz: A Critical Chokepoint Under Scrutiny
The geopolitical risks are acutely felt in the region's vital shipping lanes. Earlier reports confirmed that insurance premiums for vessels passing through the Strait of Hormuz have risen following an incident where Tehran temporarily closed the strategic waterway for several hours. The Strait of Hormuz is a critical global energy artery, facilitating the flow of roughly 20 percent of the world's oil supply.
Daniela Hathorn, a Senior Market Analyst at Capital.com, emphasized the market's focus: "Oil markets have also come back into sharp focus as tensions in the Middle East intensify. Brent crude has moved decisively above the $70 per barrel level, supported directly by rising geopolitical risk. Iran’s strategic position near the Strait of Hormuz means any sustained disruption there could have significant and immediate consequences for global energy flows and prices."
Implications for UAE Motorists in March 2026
The UAE's fuel pricing mechanism reviews petrol and diesel costs on a monthly basis. Adjustments are directly based on the average global oil prices and refined fuel costs from the preceding month. This system creates a direct correlation: when international crude prices rise, pump prices in the UAE tend to follow; conversely, when crude falls, motorists typically experience relief.
With the average price of Brent crude in February 2026 standing higher than in January, and with underlying geopolitical risks continuing to simmer without resolution, the upcoming price announcement for March may not offer the same breathing room that drivers enjoyed just one month prior. The shadow of conflict and its associated risk premium now looms large over the next pricing cycle, potentially ending the brief period of relief for consumers at the fuel pump.
