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Informist, Tuesday, Jun. 23, 2026

NEW DELHI – Crude oil inventories have been enormously draining amid disruptions in West Asia and are likely to decline further until August, said Jim Burkhard, global head of crude oil and mobility at S&P Global Energy, adding that demand to replenish reserves will support prices. "Our estimates are that (inventories) have been falling at a rate of about 5 million barrels per day, which is enormous," Burkhard said. 

"We're going to see inventories continue to decline the rest of this month and in July, maybe even in August. So as prices have come down, we don't expect prices to continue to fall or stay at that low level because there will be demand to replenish these inventories later this year and in the next year," he said at S&P Global's New Delhi energy breifing Tuesday. 

Burkhard sees crude oil prices averaging around $88-$89 per barrel in June, with some upward pressure in July and August supported by inventory replenishment demand. He sees Brent crude oil prices averaging around $91 per barrel in 2026 and $84 per barrel in 2027. However, if the US and Iran rapidly settle disputes and market confidence is restored sooner than expected, he see prices falling to $82 per barrel in 2026 and $71 per barrel in 2027.

However, he did not rule out scenarios of oil prices surging again above $105 per barrel in 2026 and around $114 per barrel in 2027 if the US-Iran peace deal falls out amid hostilities between Israel and Iran-backed Hezbollah in Lebanon. "You know, this war  is not over. And the Iranians are linking all of these issues with Lebanon...And that's been one of the Achilles' heels with the Trump administration... And that creates some issues about the durability of this current memorandum of understanding."  

Though disruptions in the Strait of Hormuz have impacted about 17% of global liquefied natural gas supply, India managed to ensure supply by diversifying import sources to Oman, the US, Nigeria, and Angola.

"India is expected to retain some of this diversified LNG sourcing considerations to mitigate future disruptions, potentially influencing its long-term sourcing strategies," said Johan Utama, principal research analyst, S&P Global Energy.

Asked about LNG price view, he said prices are likely to remain elevated with upward pressure over the next three to four months, supported by Europe's effort to replenish its gas storage ahead of winter. 

Once winter demand subsides and additional supplies from new capacities in Qatar, the US, and UAE enter the market, prices may ease, he added. 

Even if prices ease, Utama said India's LNG imports in 2026 will be lower from last year as supply disruptions and elevated prices have destroyed demand in the country and other Asian nations.  End

Reported by Afra Abubacker and Sagar Sen

Edited by Akul Nishant Akhoury

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