Oil prices are expected to remain elevated in the near term, likely staying above $80 to $85 per barrel [1].
This projection suggests that energy costs will not see a significant drop despite potential diplomatic breakthroughs. For investors and consumers in Indian energy markets, this indicates a period of sustained high costs that may shift preference toward gas stocks over oil marketing companies.
Maulik Patel, head of research and oil and gas expert at Equirus, said the price floor is expected to hold between $80 and $85 per barrel [1]. This outlook persists even if a peace deal is reached in conflict zones, Patel said.
Geopolitical tensions in West Asia, specifically concerns surrounding the Strait of Hormuz, continue to pressure global supply chains [1]. These instabilities create a risk premium that prevents prices from sliding lower despite fluctuating demand.
However, there is a ceiling on how high prices can climb. A significant decline in oil demand from China is expected to keep prices below $120 per barrel [1]. This creates a narrow corridor for price movement, a balance between Middle East instability and Chinese economic cooling.
Because of these dynamics, Equirus is favoring gas stocks over oil marketing companies [1]. The firm said the current market environment makes natural gas a more attractive hedge against the volatility of the crude oil market.
“Oil prices may stay above $80‑$85 per barrel even if a peace deal is reached.”
The forecast highlights a 'tug-of-war' in the global energy market. While geopolitical instability in the Strait of Hormuz provides a price floor by threatening supply, the slowing industrial demand from China acts as a price ceiling. This suggests that oil prices have entered a period of high-level stagnation where neither diplomacy nor economic slowdowns are likely to trigger a return to pre-crisis lows in the immediate future.
