NEW DELHI: Crude oil prices are expected to remain higher for an extended period due to disruptions caused by the prolonged Middle East crisis, according to Asian Development Bank (ADB) Chief Economist Albert Park.
Oil Price Forecast
Park stated, "With a higher oil price expectation, we actually have it as USD 96 per barrel as average for 2026 as per the new reference scenario. It should stay elevated at USD 80 per barrel in 2027. So, our idea is that the oil prices are likely to stay higher for longer." He noted that future prices are showing higher values farther into next year than previously observed.
However, he added, "We have also seen always a kind of a premium of the spot market prices and the nearby futures market because there is such a shortage currently."
Impact on India
Speaking about the impact of the ongoing West Asia crisis on India, Park said it is going to shave off 0.6 per cent from the country's GDP growth, bringing it to 6.3 per cent, and also stoke inflation significantly in the current financial year.
The ADB had projected India's GDP growth to remain "robust" at 6.9 per cent in the current fiscal year in its April report, with a rise to 7.3 per cent in the next fiscal year, driven by strong domestic demand. Regarding inflation, the ADB had projected 4.5 per cent for the current fiscal year.
These developments underscore the significant economic repercussions of the prolonged Middle East crisis, affecting both global oil markets and key emerging economies like India.
