Petrol Prices Likely to Drop in May 2025
Petrol prices in the UAE are likely to experience a drop in May 2025, following a reduction in April. This decline is attributed to various global factors, including the ongoing US tariff row, concerns over a slowdown in the global economy, and fears of a potential recession.
In April 2025, global Brent crude prices saw a significant dip, falling as low as $62.8 per barrel during early April. This drop is largely due to escalating tariff tensions and broader economic concerns. Brent crude mostly traded within the $60s per barrel range throughout the month, down from the nearly $71 per barrel average in March.
By the end of April, Brent crude was trading at $66.9 per barrel, while West Texas Intermediate (WTI) was at $63.13. This marks a significant shift compared to the previous month, with April's average price standing at $66.6 per barrel, compared to $71 in March.
In the UAE, petrol prices were reduced for the second consecutive month in April 2025. The retail prices for the various grades of petrol were as follows:
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Super 98: Dh2.57 per litre
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Special 95: Dh2.46 per litre
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E-Plus 91: Dh2.38 per litre
The UAE’s petrol pricing mechanism is linked to international crude oil benchmarks and is revised monthly. The local retail petrol prices are typically adjusted on the last day of each month, reflecting global oil price fluctuations.
The OPEC+ decision to increase oil production at a faster pace than initially expected also contributed to the downward pressure on global crude prices. This increase in production was seen as another factor influencing the reduction in petrol prices in the region.
Saxo Bank, in its second-quarter 2025 outlook, stated that Brent crude is expected to trade within a range of $65-$85 per barrel. While the immediate effects of the US tariffs on oil-importing nations are considered minimal, the market impact could increase if further sanctions and tariffs are imposed.
In its note, Saxo Bank highlighted the strategic implications of these sanctions, particularly concerning Iran and Venezuela, and the broader impact on global oil prices. The US administration's actions, including a 25% tariff on nations importing Venezuelan crude, could contribute to further fluctuations in oil prices.
