Crude Prices Dip Below $75, But Stability Remains Elusive

Global crude oil prices have retreated below the $75-per-barrel threshold following the reopening of the Strait of Hormuz, offering temporary relief to energy markets. However, analysts warn that returning to the pre-conflict baseline of $65–$70 per barrel may be a slow and volatile process.

Current market data shows Brent crude 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 currently priced at $74.34 per barrel. While these figures represent a significant drop from the extreme highs seen during the US-Iran conflict that began on February 28, they remain above the pre-war averages.

During the height of the conflict, Brent crude surged to nearly $114 per barrel. The Indian oil basket experienced an even more drastic spike, touching $150 per barrel. This surge was driven by soaring West Asian crude prices, high premiums paid by Indian refiners for spot purchases, and escalated freight and insurance costs.

Strategic Shifts in India's Crude Sourcing

A key factor in the current pricing of the Indian oil basket is a significant shift in its composition. To mitigate the risks posed by disrupted West Asian supplies, Indian refiners have aggressively diversified their sourcing.

Between the 2025-26 period and February, the Indian basket was composed of 78.71% sour crude (Oman and Dubai average) and 21.21% Brent dated. However, in March, this ratio shifted dramatically to 38.98% sour crude and 61.02% Brent dated. This strategic pivot toward Brent-heavy blends has played a decisive role in how the Indian basket reflects global market movements.

Future Outlook: Volatility and Inventory Pressures

Despite the easing of immediate geopolitical tensions with the reopening of the Strait of Hormuz, experts suggest that trade flows and production levels will take time to fully recover. S&P Global Energy notes that global oil inventories are expected to decline through June and July, a factor that could trigger renewed upward pressure on prices.

Market analysts are bracing for significant swings. Jim Burkhard of S&P Global Energy expects Brent to fluctuate between $65 and $100, with a potential move 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 per barrel in the fourth quarter.

Key Takeaways

  • Price Recovery is Slow: While crude has fallen below $75, it remains above the $65–$70 pre-conflict levels due to lingering supply and trade flow disruptions.
  • Diversification in India: Indian refiners have significantly increased their reliance on Brent crude, shifting from ~21% to ~61% of the Indian oil basket to hedge against West Asian supply risks.
  • High Volatility Ahead: Analysts expect continued price swings between $65 and $100, driven by declining global inventories and ongoing geopolitical developments.