Patna: India, one of the world’s largest oil importers, may be headed for unexpected relief as global investment banks forecast a steep decline in crude prices over the next two years. A new JP Morgan report suggests that a massive supply surplus—driven largely by non-OPEC countries—could push prices to levels not seen in years.
At present, crude trades at around $66 per barrel, but JP Morgan expects it to slide to $50 in 2026, before plunging further to $30 by 2027. If these projections hold, petrol and diesel prices could drop close to half of what they would otherwise cost.
Why Oil Might Get Cheaper
The bank attributes the anticipated fall to a major surge in global supply, especially from non-OPEC countries expanding offshore (deep-sea) production. While global oil demand is expected to rise gradually—0.9 million barrels per day (mbd) in 2025, stabilising in 2026, and increasing again by 1.2 mbd in 2027—JP Morgan predicts that supply will grow nearly three times faster in 2025 and 2026.
This imbalance, the bank says, could trigger a broad-based slide in international oil prices.
Goldman Sachs has issued a similar forecast. It expects crude to hover around $53 per barrel in 2026, though it believes prices may rebound in 2027.
India: The Biggest Winner
With India importing 80% of its crude oil, any decline in global prices has an outsized effect on the economy. For every $1 drop in crude, India’s current account deficit narrows by $1.5 billion — a substantial gain.
Currently, crude on MCX is priced at Rs. 5,374 per barrel, while Brent crude trades internationally at $66.93 per barrel.
If JP Morgan’s predictions materialise, India will not only save billions in import expenditure but also benefit across sectors such as aviation, tyres, refining, chemicals and paints — all of which rely heavily on petroleum-derived inputs.
Offshore Production Driving the Shift
Offshore oil exploration—once considered costly and unpredictable—has become more reliable and cheaper, according to industry data. Offshore producers are expected to add:
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0.5 mbd in 2025
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0.9 mbd in 2026
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0.4 mbd in 2027
By 2029, almost all planned FPSO (floating production storage and offloading) units have received approvals, pointing to sustained supply growth.
What Happens If Prices Keep Falling?
Lower crude prices typically benefit:
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Aviation — reduced fuel cost
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Tyre and chemical manufacturers
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Paint companies
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Refinery and marketing firms — which enjoy higher margins
However, they may also pressure oil-exporting nations and destabilise global energy markets if prices fall too sharply.
