Crude Oil Prices: News of a peace agreement between the US and Iran caused the price of crude oil in the global market to fall below $83 per barrel. This led to speculation that petrol and diesel prices would fall.

Crude oil prices are predicted to fall further.

Crude oil: Following news of a peace agreement between the US and Iran regarding a ceasefire and the opening of the Strait of Hormuz, benchmark Brent crude prices have slipped below $83 per barrel. Similarly, US WTI crude is also trading near $81.

Meanwhile, two global brokerage firms, Morgan Stanley and Goldman Sachs, have lowered their crude oil price forecasts to $80 per barrel, according to a Bloomberg report. An interim peace agreement between the United States and Iran is scheduled to be signed in Switzerland next Friday (June 19). Meanwhile, following the resumption of shipping through the Strait of Hormuz, these two major financial institutions have released their crude oil price forecasts.

Now that a peace agreement is imminent, global gas and oil supplies will return to normal through the Strait of Hormuz. The long-standing blockade imposed by both the US and Iran will also be lifted, ending the uncertainty surrounding global energy supplies. Consequently, these banks have significantly downgraded their previous estimates.

What is Goldman Sachs' stance?

Goldman Sachs has lowered its Brent crude oil price forecast for the fourth quarter of 2026 to $80 per barrel from the previous $90. It has also lowered its average forecast for 2027 to $75 per barrel from $80 per barrel.

What did Morgan Stanley say?

Morgan Stanley also cut its fourth-quarter (Q4) Brent crude price forecast by $15 to $80 per barrel, down from $95 a barrel amid the war and uncertainty. Its third-quarter (Q3) forecast was cut by $10 to $90 per barrel from $100.

Why is this estimate important for India?

India imports more than 85% of its crude oil needs from abroad. Therefore, if crude oil prices fall to $80 per barrel, it will reduce India's import bill. India spends a significant amount of dollars from its foreign reserves to pay for crude oil purchases. This puts pressure on the rupee, leads to skyrocketing inflation, and a widening current account deficit.

The rise in crude oil prices over the past few days has resulted in a nationwide increase of approximately ₹7.50 per litre for petrol and diesel. This has led to increased logistics and transportation costs and increased production costs. Consequently, the prices of many commodities have risen.