The spotlight is on Crude oil following the ousting of Venezuelan President Nicolas Maduro by the Trump administration. Venezuela houses 18% of the world’s proven oil reserves but produces less than 1% of global crude output. With OPEC+ deciding to keep the output steady amidst an already existing supply glut in the market, SBI Research suggests that crude oil prices are expected to soften significantly by the first half of 2026.
But what does this mean for India? Here are three major takeaways of what SBI Research expects for the future of Indian crude oil basket:
#1 Indian basket to reach $50/bbl by mid-2026
As per the report, prices of the Indian crude oil basket are trending lower, tracking declines in Brent crude. The Indian crude oil basket is the weighted average price of crude oil varieties imported by India, reflecting the average cost of its imports. SBI Research expects the Indian basket to slump to the $50 per barrel level or even lower by mid-2026.
The report projects the Indian basket at $53.31 per barrel by March 2026, before slumping further to $51.85 per barrel by June 2026.
#2 Inflation to remain below 3.4%
According to the SBI report, the slump in the Indian crude oil basket is likely to be reflected in the retail prices of petroleum products. Additionally, fuel prices in the CPI basket may also ease due to the same. This cooling in Indian crude oil basket prices could bring CPI inflation for FY27 below 3.4%, the report added.
#3 Rupee may strengthen to 88/dollar
With oil having a dominant share in India’s import basket, a fall in crude oil prices will reduce the oil import bill, helping strengthen the Indian rupee. The report added that, given the ongoing trend, the currency may hover near the 88 level against the US dollar by Q4FY26.
The SBI report used the base price of Rs 90.28 per dollar and added that the currency may appreciate by around 3%, with the rupee potentially moving to the 87.5 mark against the greenback.
Additionally, lower energy prices are expected to have a positive impact on the country’s GDP, which may rise by around 10–15 basis points, the report added