Crude Oil Prices Fall Below $75 but Volatility Remains High

Global crude oil prices have finally dipped below the $75-per-barrel mark following the reopening of the Strait of Hormuz. While this provides some relief to global markets, experts warn that prices are unlikely to return to the pre-conflict stability of $65–$70 per barrel in the immediate future.

The Current State of Global and Indian Crude Markets

As of the latest market reports, Brent crude is trading at approximately $73.4 per barrel. The Indian oil basket—a critical blend of sweet-grade Brent dated and sour-grade Oman and Dubai average crude—is priced at $74.34 per barrel. This represents a significant drop from the extreme peaks witnessed during the US-Iran conflict that commenced on February 28.

During the height of the geopolitical tension, Brent crude surged to nearly $114 per barrel. The Indian oil basket, however, faced even steeper climbs, touching the $150 mark. This spike was driven by a combination of surging West Asian crude prices, Indian refiners making spot purchases at massive premiums, and skyrocketing freight and insurance costs.

Shift in India's Crude Sourcing Strategy

A major factor in the current pricing of the Indian oil basket is a significant shift in its composition. Prior to the conflict, during the 2025-26 period through February, the Indian basket was heavily reliant on sour crude, which accounted for 78.71% of the mix, with Brent dated making up only 21.21%.

However, in March, Indian refiners proactively diversified their sourcing to mitigate the risks of disrupted West Asian supplies. This strategic move saw the composition flip: Brent dated now makes up 61.02% of the basket, while sour crude (Oman and Dubai average) has dropped to 38.98%. While this diversification helps supply security, it also alters how price fluctuations in the Brent market impact India's national oil bill.

Expert Projections and Market Volatility

Despite the current downward trend, market analysts suggest that the "calm" may be temporary. S&P Global Energy indicates that even with the reopening of the Strait of Hormuz, a full recovery in production and global trade flows will take time. Furthermore, global oil inventories are expected to decline through June and July, which could exert fresh upward pressure on prices.

Jim Burkhard, head of research at S&P Global Energy, notes that extreme volatility is expected. He suggests Brent could swing between $65 and $100 depending on geopolitical developments, with a likely movement toward the $80–$90 range. Meanwhile, JP Morgan has adjusted its outlook, forecasting Brent to average $86 per barrel in the third quarter of 2026 and $80 in the fourth quarter.

Key Takeaways

  • Price Recovery Lag: While crude has fallen below $75, it remains well above the pre-conflict baseline of $65–$70 per barrel.
  • Strategic Diversification: Indian refiners have significantly increased their Brent-dated crude mix from ~21% to over 61% to bypass West Asian supply disruptions.
  • Continued Volatility: Analysts predict significant price swings, with Brent potentially hitting $100 or dropping to $65 based on inventory levels and geopolitical shifts.