Crude Prices Likely To Stay Elevated As Global Supply Pressures Persist
Global crude oil prices are unlikely to return to their pre-conflict levels of the high US$ 60s to low US$ 70s per barrel, with analysts expecting a prolonged period of elevated prices as supply chains gradually stabilise.
According to Bank of America (BofA), even under an optimistic scenario, crude is expected to settle in a new range of US$ 90–95 per barrel, driven by inventory rebuilding across Asia and delayed normalisation of Middle East supply networks.
While major producers, particularly the United States, are ramping up output, strong restocking demand from large importers such as China and Japan is expected to keep prices firm.
Higher oil prices are expected to weigh heavily on energy-importing nations, with Europe and India among the most exposed.
For India, elevated crude prices could widen the current account deficit and add pressure on the rupee. However, analysts note that part of India’s import growth is linked to productive capital investment, which could support long-term economic expansion.
BofA expects the Reserve Bank of India (RBI) to maintain its current policy stance in the near term, although prolonged high energy prices could trigger rate hikes later this year or in early 2027.
Analysts said central banks are likely to look beyond short-term energy-driven inflation spikes, but sustained price pressures and second-round inflation effects may force tighter monetary action if crude remains elevated.
