Emkay sees Brent at $90, India growth at 6.3% – Firstpost

The global oil crisis may be far from over even though Brent crude has cooled from its recent highs. A new Emkay Research report has warned that underlying supply pressures remain intense, with falling inventories and geopolitical uncertainty likely to keep crude prices elevated in the coming months.

According to Emkay Research’s report titled “Oil Imbalances: The Price Of War And Resilience”, Brent crude prices have declined nearly 25 per cent from their crisis peak of around $125 per barrel on expectations of a possible US-Iran agreement. However, the brokerage said the oil market remains vulnerable as temporary buffers supporting supply are beginning to weaken.

The report said global inventories could approach critical levels by late June or early July 2026 if normal flows through the Strait of Hormuz (SoH) are not restored. A prolonged disruption could lead to another round of price spikes as emergency reserves, inventory drawdowns and demand adjustments lose effectiveness.

“Oil realities are muddier,” Emkay Research said, adding that even a reopening of supply routes may not immediately bring prices down because geopolitical risks, logistics issues and inventory rebuilding needs could keep crude prices sticky.

Brent forecast raised to $90 per barrel

Emkay has raised its FY27 average Brent crude price estimate to $90 per barrel from $80 earlier, citing tighter market conditions. It expects prices to remain elevated before gradually easing towards $75 per barrel by Q4FY27.

The report highlighted that emergency measures such as strategic petroleum reserve releases, inventory withdrawals by OECD countries and China, refinery production cuts and lower demand have helped contain prices so far.

However, these temporary cushions may weaken if the West Asia crisis continues.

India’s growth outlook lowered

The impact of higher crude prices could also spill over into India’s economy.

Factoring in elevated oil prices and potential El Niño-related risks, Emkay Research has lowered its FY27 GDP growth estimate by 30 basis points to 6.3 per cent.

The brokerage expects headline inflation to average 5.1 per cent in FY27, factoring in higher fuel prices and broader spillover effects across the economy.

Emkay said the final impact will depend on how the burden of higher crude prices is shared between oil marketing companies (OMCs), the government and consumers. A balanced sharing of the shock would be the least damaging outcome for economic growth, according to the report.

India’s external risks rise

The bigger concern, Emkay said, lies in India’s external sector. The brokerage now expects India’s current account deficit (CAD) to widen to 2.3 per cent of GDP in FY27, compared with its earlier estimate of 1.7 per cent under a lower crude price assumption.

It also warned that India’s balance of payments deficit could exceed $75 billion without stronger measures to attract foreign capital. RBI may focus on inflation, not rupee defence. The report added that India’s long-term policy focus should move towards energy security through efficiency, diversification, electric vehicles, public transport and renewable energy adoption.

With global inventories shrinking and West Asia uncertainty continuing, Emkay said the oil market remains vulnerable despite recent price relief.