Crude Prices Dip Below $75, But Recovery to Pre-War Levels Remains Slow

Global crude oil prices have seen a significant reprieve, with Brent crude dropping below the $75-per-barrel threshold following the reopening of the Strait of Hormuz. However, market analysts warn that while the immediate tension has eased, prices are unlikely to return to the stable $65–$70 range seen before the US-Iran conflict.

The Current State of Global and Indian Oil Markets

As of the latest market reports, Brent crude is trading at approximately $73.4 per barrel. The Indian oil basket, which is a strategic blend of sweet-grade Brent dated and sour-grade Oman and Dubai average crude, is priced at $74.34 per barrel. While these figures represent a massive decline from the height of the geopolitical conflict, they still remain above the pre-war average of $65–$70.

The volatility seen during the peak of the conflict was extreme. Brent crude had surged to nearly $114 per barrel, while the Indian oil basket reached a staggering $150. This spike in India was driven by a combination of surging West Asian crude prices, Indian refiners making spot purchases at high premiums, and significantly increased freight and insurance costs.

Shift in the Indian Oil Basket Composition

A critical factor in the current pricing of the Indian oil basket is the strategic shift in sourcing by domestic refiners. To mitigate the risks posed by disrupted West Asian supplies, refiners significantly altered their crude mix.

During the 2025-26 period through February, the Indian basket was heavily weighted toward sour crude, consisting of 78.71% Oman and Dubai average crude and only 21.21% Brent dated. However, in March, this composition underwent a dramatic shift: Brent dated rose to 61.02%, while sour crude dropped to 38.98%. This diversification was a tactical move to ensure energy security amidst regional instability.

Volatility and Future Price Outlook

Despite the recent dip, experts suggest that the market is far from a return to normalcy. S&P Global Energy notes that while the Strait of Hormuz has reopened, a full recovery in global production and trade flows will take time. Furthermore, global oil inventories are projected to decline through June and July, a factor that could trigger fresh upward pressure on prices.

Market analysts are predicting a wide range of movement for Brent crude. Jim Burkhard of S&P Global Energy suggests that Brent could move into the $80–$90 range, with potential swings as low as $65 or as high as $100 depending on geopolitical developments. Adding to this cautious outlook, JP Morgan has lowered its average Brent price forecasts, expecting an average of $86 per barrel in the third quarter of 2026 and $80 per barrel in the fourth quarter.

Key Takeaways

  • Pricing Trends: While Brent and the Indian oil basket have dropped below $75, they remain higher than the $65–$70 pre-conflict levels.
  • Strategic Diversification: Indian refiners have significantly increased their intake of Brent dated crude (from ~21% to ~61%) to hedge against West Asian supply disruptions.
  • Market Outlook: High volatility is expected, with global inventory declines through mid-year potentially pushing prices back toward the $80–$90 range.