Global crude oil prices are projected to experience minimal increases in the short term and are anticipated to stabilize around $68–70 per barrel in the long run, as per a report by Emkay Wealth Management Limited. Despite geopolitical tensions and supply-side uncertainties, any upward movement is likely to be gradual and constrained due to sluggish global growth and cautious spending in major economies. Brent crude has remained within the $60–65 range for over a year, attributed to the imbalance between demand growth and emerging supply despite OPEC+ production cuts.
The report highlights that demand forecasts are trailing incremental production additions, leading to a surplus that has resulted in reduced capital expenditure in the energy sector. Major oil and gas companies are postponing investments to maintain financial stability. Recent normalization of output from Venezuela and Iran, with a significant portion directed towards Asian markets, especially China, has introduced uncertainty due to evolving geopolitical dynamics.
Dr. Joseph Thomas, Head of Research at Emkay Wealth Management, mentioned that while short-term geopolitical events may temporarily boost oil prices, the fundamental market conditions indicate any price rally will be limited. Energy firms and market players are advised to adopt capital discipline and operational efficiency strategies instead of relying on price-driven growth. Forecasts by the US Energy Information Administration suggest that global oil inventories will continue to rise until 2026, potentially exerting downward pressure on prices, with an estimated average Brent crude price of around USD 55 per barrel in 2026, signaling a persistent oversupply.
