In a sigh of relief for India, S&P Global Commodity Insights predicts crude oil prices to remain under pressure and decline below $60 by the end of this year, largely due to supply exceeding demand.

Crude prices have spiked to $80 a barrel recently on the back of escalating conflict between Iran and Israel, including a US strike on Iran’s nuclear sites. Despite this, lingering tensions could still lead to different outcomes influencing market dynamics.

Premasish Das, Executive Director for Oil Markets Research and Analysis, S&P Global Commodity Insights, said the updated oil price outlook now forecasts an average Brent price of $68 a barrel for 2025, up from $63 a barrel, but expects a decline below $60/b by year-end due to strong supply growth.

In the long term, global oil demand is projected to decline due to the adoption of alternative energy sources and efficiency gains, although prices may remain stable to support new discoveries.

The Trump administration’s sweeping tariffs on all trading partners have introduced significant economic uncertainty, potentially reducing global GDP growth from 2.8 per cent in 2024 to 2.2 per cent in 2025.

The slowdown could cut oil demand growth from 1.2 million barrels per day to 0.8 million b/d, with the possibility of zero or negative growth in the second half of the year.

Demand from China and the US is expected to be most affected, particularly for refined products such as diesel and jet fuel. Meanwhile, OPEC+ raised output by 411,000 b/d for May–July 2025, triggering a 20 per cent drop in Brent prices. The increase, driven by frustration among compliant producers, may be offset if overproducers such as Iraq, Russia, and Kazakhstan reduce their output, he said.

Rahul Kapoor, Vice President and Global Head of Shipping Research at S&P Global Commodity Insights said India stands at a critical inflexion point with immense potential to capture a greater share of global trade.

Regarding maritime activity, he emphasised the need for continued vigilance in the Strait of Hormuz amid heightened geopolitical risks. While tanker traffic remains stable, India has reduced its exposure to the Strait from 55 per cent in 2019-22 to 41 per cent in 2024, thanks to increased imports of Russian crude, he said.

Eduard Sala de Vedruna, Head of Research, Energy Transition, Sustainability and Services, S&P Global Commodity Insights, said the government had set ambitious targets for renewable energy capacity of 175 GW by 2022 and 450 GW by 2030, with the 2022 target not being met, it was revised to be achieved by 2030, aiming to achieve a renewable energy capacity of 500 GW.

“We believe, the target date may shift to 2032 instead of 2030. Currently, the total installed renewable capacity has surpassed the 200 GW mark,” he said.

Published on June 30, 2025