Analysts Predict Crude Oil Prices to Hover Between $65 and $70 per Barrel in 2025: Key Insights for Investors

Crude oil prices are expected to average between $65 and $70 per barrel this year, with a possibility of dropping even lower in 2026 due to weak global demand and increased supply, say analysts.

Recently, Brent crude oil prices fell significantly to about $60 per barrel. This drop followed a decision by OPEC, led by Saudi Arabia, to boost output by an additional 411,000 barrels per day in June, mirroring a similar increase made the previous month.

Manas Majumdar, a partner at PwC India, predicts that crude prices might average $70 this year, potentially dipping to around $60 in 2026. He expects OPEC will respond to lower prices by cutting supply, which may help stabilize prices later on.

In April, the average price for India’s crude oil basket was reported at $67.73 per barrel, but it fell to $61.89 on May 1. Analysts from Motilal Oswal expect a steady average of $65 per barrel in the fiscal year 2026. The decline in prices from over $77 per barrel in March is largely due to fears of a global recession and increased tariffs from China, along with OPEC’s production increases. Prashant Vasisht from Icra highlights that these factors put downward pressure on prices.

Lower crude prices can actually benefit state-owned oil companies like Indian Oil, Bharat Petroleum, and Hindustan Petroleum. With crude oil prices dropping, these companies could see increased marketing margins, enhancing their profitability. Elara Securities notes that in the first quarter of fiscal year 2026, international crude trades at about $65 per barrel, down $10 from the previous quarter, which has improved petrol and diesel margins for these companies by ₹3.5 per liter. Every $1 drop in crude oil boosts gross margins for gasoline and diesel by ₹0.55 per liter.

The outlook for oil marketing companies seems positive. Elara Capital predicts a 49% increase in BPCL’s integrated margins in FY26 compared to FY25, reaching ₹4,023 per tonne. Similarly, IOCL’s margins may rise by 91%, totaling ₹4,000 per tonne.

However, lower oil prices pose challenges for exploration companies like ONGC and Oil India, as decreasing prices can hurt their revenue and crude price realizations.

Megha Arora from IndusLaw explains that while the Indian downstream sector benefits from lower prices—reducing import bills and boosting marketing margins—the upstream sector faces difficulties, particularly since domestic production prices are linked to international prices.

Industry experts suggest that the downward trend in international oil prices may continue. If this holds, there could be room for the three major oil marketing companies to lower retail prices for fuels. Indian Oil Minister Hardeep Singh Puri recently stated that reductions in petrol and diesel prices are possible if crude stays around $65 per barrel. Notably, just before the upcoming general elections in 2024, the government had previously reduced fuel prices by ₹2 per liter.

Looking ahead, the oil market’s volatility means businesses, consumers, and policymakers must stay alert to changing trends and potential shifts in pricing.

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ONGC, Oil India, Indian Oil, Bharat Petroleum Corp, Hindustan Petroleum Corp