Crude Prices Dip Below $75, But Stability Remains Elusive

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

The Current Landscape: Brent vs. the Indian Oil Basket

As of recent trading, Brent crude has been hovering around $73.4 per barrel. Interestingly, the Indian oil basket—a strategic blend of sweet-grade Brent dated and sour-grade Oman and Dubai average crude—was priced at $74.34 per barrel. While these figures represent a significant drop from the extreme volatility seen during the US-Iran conflict that erupted on February 28, they remain higher than the $65–$70 range seen prior to the tensions.

The disparity in pricing is largely due to the dramatic shifts in supply chains. During the peak of the conflict, Brent crude surged to nearly $114 per barrel, while the Indian oil basket skyrocketed to $150. This spike was driven by a combination of soaring West Asian crude prices, Indian refiners making expensive spot purchases at high premiums, and a massive increase in freight and insurance costs.

Strategic Shifts in Indian Crude Sourcing

One of the most critical factors keeping the Indian oil basket prices elevated is the shift in its composition. To mitigate the risks posed by disrupted West Asian supplies, Indian refiners have aggressively diversified their sourcing.

Between 2025-26 and 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 massive shift: Brent dated increased to 61.02%, while sour crude dropped to 38.98%. This diversification, while necessary for energy security, fundamentally alters the pricing dynamics of the domestic basket compared to global benchmarks.

Future Outlook: Volatility and Inventory Risks

Despite the reopening of the Strait of Hormuz, analysts suggest that a full recovery in global production and trade flows is not imminent. S&P Global Energy notes that global oil inventories are expected to decline through June and July, a factor that could reignite upward pressure on prices.

Market experts are bracing for continued volatility. Jim Burkhard of S&P Global Energy suggests that while Brent is currently around $76, it could move toward the $80–$90 range, with a wide swing potential between $65 and $100 depending on geopolitical developments. Meanwhile, JP Morgan has taken a slightly more moderated view, lowering its Brent price outlook to an average of $86 per barrel for the third quarter of 2026 and $80 for the fourth quarter.

Key Takeaways

  • Price Disparity: While Brent sits near $73.4, the Indian oil basket is slightly higher at $74.34 due to changes in crude mix and sourcing strategies.
  • Composition Shift: Indian refiners have pivoted from a 78.71% sour crude dependency to a majority Brent-based mix (61.02%) to ensure supply security.
  • Continued Volatility: Declining global inventories through mid-year and ongoing geopolitical tensions mean prices could swing significantly between $65 and $100.