New Delhi: International crude oil prices have remained elevated, ruling above $100 per barrel for most of the past three months since the West Asia war began on 28 February. Though prices have moderated since the benchmark Brent crude hit a four-year high of $126.41 a barrel on 30 April, volatility has remained pronounced.
Crude prices eased over the past week, with Brent nearing $90 per barrel. Still, prices remain significantly higher than the pre-war levels. Given that India imports around 90% of its crude oil requirements, Mint takes a look at the price trend since the start of the war and its impact on the Indian economy.
What was the crude price trend before the start of the war?
Before Israel and the US began bombing Iran on 28 February, crude was around $70 per barrel. Last year, crude traded in a range of $60-$80 per barrel. In January 2025, Brent was around $79 a barrel and in December, it fell to $61. The subdued prices over the past year were largely due to concerns over oversupply and weak demand outlook in key markets including China.
What has been the peak crude price during the ongoing war?
Brent reached on 30 April after Trump indicated that the naval blockade of Iranian ports by the US would continue until Iran agrees to a new nuclear deal. On 30 April, Trump also said that there will never be a deal unless Iran agrees that there will be no nuclear weapons.
What caused oil prices to ease over the past one week?
The ongoing peace talks between have led to a decline in prices, although uncertainties persist over the outcome of the talks. However, a fresh round of strikes on Iran, which retaliated by hitting American bases in the Gulf, once again lifted oil prices. According to the US military, Iran fired missiles towards Kuwait and Bahrain, but the attacks failed to hit their intended targets. Meanwhile, the US has targeted Iran’s Qeshm Island. Israel also continued its strikes on Lebanon, raising concerns that efforts to secure a diplomatic resolution could be jeopardised.
What has been the impact of the volatile oil prices on the Indian economy?
Given India’s dependence on imported oil for 90% of its requirements, the supply disruption and price volatility has significantly impacted the Indian economy. Petrol and diesel prices, which were kept unchanged for over two months by state-run oil marketing companies since the war began, have been raised four times with a cumulative hike of around ₹7.5 per litre. Industrial fuels have witnessed steeper hikes. This is expected to raise inflation and hurt economic growth. India’s surged to a 42-month high of 8.3% in April, driven by a sharp rise in fuel, crude petroleum and manufactured product prices. Similarly, retail inflation rose to a 13-month high in April to 3.48%.
What is the outlook on oil prices?
Analysts had projected a further surge in crude prices in case the war stretched, with some anticipating Brent touching $200 per barrel within this year. However, the prospects of the ongoing peace talks are expected to anchor the prices going ahead. Although, supply risks are likely to keep prices elevated, Goldman Sachs recently flagged weakening demand—in China and western Europe—as a factor weighing on the prices. The bank said the weak demand creates an around $10 a barrel of downside risk to its Brent crude price forecast of $90 a barrel for the fourth quarter of 2026. The International Energy Agency recently estimated world oil demand to contract by 420,000 barrels per day (bpd) on a year-on-year basis in 2026, to 104 million bpd.
Timeline of oil price trend:
2 March: Brent crude surged 10% to nearly $82 per barrel after the killing of Iran’s Supreme Leader Ali Khamenei by US-Israeli strikes, followed by Iran’s attacks on US military bases across West Asia and closure of the Strait of Hormuz.
9 March: Oil surged over 20% to cross the $100 per barrel mark amid supply disruption at Strait of Hormuz and strikes of Israel and the US on energy infrastructure across Iran — including desalination plants and oil depots. Brent rose about 23% to $114 per barrel.
10 March: Brent was back below $100 per barrel as prices fell around 10% after US president Donald Trump said the US administration would remove oil-related sanctions and suggested the war could end soon, easing market concerns.
“We’re looking to keep the oil prices down,” he told the media.
19 March: Brent rose about 4% to around $112/bbl following Israel’s strike on Iran’s South Pars gas field—the world’s largest— and Iran’s retaliatory attacks on Qatar’s Ras Laffan industrial city, a major global gas hub.
8 April: Brent fell about 14% to $95 per barrel after the US, Israel and Iran agreed to a two-week ceasefire.
30 April: Brent rose around 7% to hit a four-year high of $126 a barrel on the Intercontinental Exchange after Trump indicated that the naval blockade of Iran ports in the Strait of Hormuz by the US would continue until Iran agrees to a new nuclear deal.
6 May: Brent fell about 8% to nearly $100 per barrel amid reports that the US and Iran were considering a fresh peace deal proposal.
25 May: Oil prices slumped over 4% on Monday, with Brent crude falling to $99 per barrel after Trump said the peace negotiations with Iran were proceeding in an orderly and constructive manner.
29 May: Brent fell 1% to around $92 per barrel amid reports that Iran and the US have agreed to extend their fragile ceasefire by 60 days.