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Informist, Thursday, Mar. 5, 2026

 

By Taniva Singha Roy

 

MUMBAI – Rising hostilities in West Asia will likely keep crude oil prices on an upward trajectory for most of March, according to analysts. Unless there is a resolution to the military conflict between US-Israel and Iran, supply issues due to the closure of the Strait of Hormuz will persist, they said.

 

The military conflict between Iran and US-Israel entered the sixth day Thursday, with Iran and Israel launching fresh strikes against each other. Iran's Revolutionary Guards has closed the Strait of Hormuz--a strategic "choke-point" for supply of crude oil--to ships from the US, Israel, Europe and other Western allies. This poses a rise to supply of 20 million barrels of crude oil daily.

 

According to the median of estimates from seven broking firms polled by Informist, the March crude oil contract on the Multi Commodity Exchange of India is seen in a range of INR 6,450-INR 7,700 per barrel this month. The April contract of West Texas Intermediate crude oil on the New York Mercantile Exchange is expected to trade between $68 and $85 per barrel.

 

In the initial few days of the month, crude oil prices are likely to remain highly volatile and on the higher side due to the geopolitical tensions. But going ahead, the US crude oil inventory data, China's demand outlook, and trajectory of the dollar will determine the prices, according to analysts at Reliance Securities.

 

"This higher pricing largely reflects a temporary risk premium tied to fears of potential supply disruptions. If tensions ease, that premium may gradually fade," Ajay Kedia, founder and director of Kedia Advisory, said in a note.

 

Till tension persists in West Asia, crude oil prices will remain on the upside and the West Texas Intermediate could probably rise to around $75 a barrel this week and Brent could be around $85-$86 a barrel, Manoj Jain, director of commodity brokerage Prithvi Finmart, said.

 

In the long term, analysts see an overall bearish outlook. A global supply surplus averaging just under 1 million barrels per day is seen in 2026, Kedia said. Also, oil exports from Venezuela are expected to rise modestly by 2027, adding to the global supply. Though India may have halted crude oil imports from Russia under the US trade deal, those barrels are likely to continue circulating in the global market, he added.

 

Moreover, the Organization of the Petroleum Exporting Countries and its allies Sunday decided to resume unwinding of 1.65 million barrels per day of additional voluntary production cuts announced in April 2023. The eight member nations of OPEC and allies--Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman--have agreed to implement a production hike of 206,000 barrels per day in April.

 

However, some experts pointed out that bulk of OPEC's spare capacity sits in the Persian Gulf. Therefore, if the Strait of Hormuz is blocked, this additional supply will be of little help to the market.

 

Going ahead, supply and demand forecasts remain mixed. Goldman Sachs has raised its second-quarter 2026 Brent price forecast to $76 per barrel, while the International Energy Agency expects global oil demand to grow by 930,000 barrels per day this year. If supply flow is back to normal, then prices can fall sharply to around $60 per barrel.

 

In the event of significant disruptions to oil supply, "the quickest action we are likely to see from governments is a coordinated release of oil from strategic petroleum reserves," Warren Patterson, head of commodities strategy at ING Economics, said in a note.

 

"Indian refiners currently have sufficient crude stocks but have begun negotiating for incremental crude oil cargoes from the US, Russia, and West Africa to ensure comfortable supplies in case of prolonged conflicts in West Asia," S&P Global said in a note. However, alternate sourcing can be costlier due to higher prices, freight, insurance costs, and longer shipping routes, it said.

 

If hostilities between the countries come to an end, the risk premium for crude oil could be wiped out, analysts said. At 1719 IST, the most-active April contract of crude oil on the NYMEX was up 3.1% at $76.97 per barrel. The most-active March contract of crude oil on the MCX was up nearly 2% at INR 7,065 per barrel.

 

Following are the estimates of brokerages for crude oil prices in March:

 

Brokerage	MCX support (in INR)	MCX resistance (in INR)	NYMEX WTI support (in $)	NYMEX WTI resistance (in $)
Kedia Advisory	5,980	7,850	65	85
Kotak Securities	6,100	7,500	70	100
Nirmal Bang	6,450	7,800	68	83
Prithvi Finmart	6,600	7,550	70	84
Reliance Securities	6,600	7,700	70	85
SMC Global Securities	6,200	7,950	67	90
Ventura Securities	6,961	5,850	65	75.54
MEDIAN	6,450	7,700	68	85

 

End

 

US$1 = INR 91.60

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Ashish Shirke

 

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