Crude Oil Prices Expected to Stabilise at $65 Following Iran-Israel Ceasefire: SBI Report

Crude oil prices are likely to settle around USD 65 per barrel after a ceasefire was announced between Iran and Israel, according to a recent report by the State Bank of India (SBI). The geopolitical tension had kept global markets on edge, but the truce has brought a wave of relief across oil-importing economies.

SBI Outlines Three Conflict Scenarios

The SBI report outlines three potential scenarios that could have shaped crude oil price movements amid the Iran-Israel conflict:

1. Full-scale Iranian retaliation: This could have pushed crude prices to a dangerous $130–$140 per barrel, putting severe pressure on oil-importing economies.
2. Prolonged hostilities with symbolic retaliation: Prices would likely have hovered around $80–$90 per barrel.
3. De-escalation through ceasefire: This would calm markets and pull prices down to a more stable range of $65 per barrel.

Now that the third scenario has materialised, the report expects prices to remain subdued unless there is a major flare-up. The report noted that the worst-case projections now seem increasingly unlikely, as a long-term price spike would have required escalation to the level of weapons of mass destruction usage, a scenario the report considers highly improbable.

Recent Price Movements Reflect Market Anxiety

Crude oil had surged to USD 79 per barrel earlier this week amid fears of an expanding conflict involving Iran, Israel, and the United States. However, following the announcement of the ceasefire by US President Donald Trump, markets have begun to cool. Trump, in a statement posted on Truth Social, described the agreement as a “complete and total” ceasefire that would take effect within six hours.

Economic Implications for India and Global Markets

As tensions ease, analysts anticipate that global oil markets will stabilise, benefiting major oil-importing nations like India. A sustained drop in crude prices will likely reduce India’s current account deficit and support broader economic growth. The SBI report also emphasised that while markets may remain cautious, the current ceasefire is a significant de-escalation step and could lead to prolonged stability in energy markets.

Disclaimer:  At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations