Kotak raises FY27 crude oil price assumption to $100 a barrel amid West Asia conflict
Renewed attacks on Saudi infrastructure and oil tankers have heightened supply concerns, while elevated freight rates reflect continued pressure across energy markets.
Kotak Institutional Equities has increased its crude oil price forecast for the fiscal year 2027 to USD 100 per barrel, up from the previous USD 90 per barrel estimate. This upward revision stems from prolonged supply disruptions caused by the ongoing conflict in West Asia, which has persisted for eight months with no clear timeline for normalcy.
Despite the significant impact of the conflict, global oil markets have demonstrated resilience in managing the situation. The brokerage maintains its crude oil price assumption at USD 75 per barrel for the long term, anticipating a decrease in prices during the second half of FY2027 if tensions ease and supply flow normalizes. The ongoing West Asia conflict has resulted in one of the most substantial oil supply disruptions in recent history.
While global oil markets have shown resilience, renewed attacks on Saudi infrastructure and oil tankers in the Strait of Hormuz have heightened tensions, leading to crude oil prices reaching six-month highs. Freight rates for crude oil and product tankers have also reached multi-year peaks. Currently, Brent crude averages nearly USD 104 per barrel for FY2027, trading at USD 128 per barrel at the time of the assessment.
Dated Brent averaged USD 126 per barrel in October, with an annual average for FY2027 at USD 104 per barrel. The report anticipates a softening in crude oil prices during the second half of FY2027, assuming the conflict does not exacerbate and supply flows continue to improve. The revision reflects a higher expected average crude oil price for the fiscal year, alongside the expectation that prices may decrease as supply conditions normalize.
The outlook remains contingent on the conflict's progression and the restoration of global oil supply.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
