Brent Crude Prices May Moderate to USD 70 Per Barrel in 2027 as Middle East Tensions Ease: SBI Report

New Delhi, Nov 13 (KNN) Brent crude prices could moderate to around USD 70 per barrel in 2027 as prospects of de-escalation in the US-Iran conflict and rising Middle Eastern exports ease pressure on global oil markets, according to a report by the State Bank of India (SBI).

The report's LTSM forecast expects Brent to average around USD 87 per barrel over the next 10 days before easing further. 

“Possibility of peace deal, more predictable US after mid-term elections, increasing crude exports from Middle East despite shortage in diesel will help prices stay on the lower side and could touch February 2026 levels of around USD 70 in 2027,” ANI reported, citing the report.

SBI Expects 25-bps Rate Hike in December

SBI said improving external conditions have reduced the likelihood of a larger interest rate adjustment by the Reserve Bank of India (RBI).

Consumer price index (CPI) inflation crossed the 6 per cent mark for the first time in the new series, reaching 6.09 per cent in October 2026 and exceeding the RBI's upper tolerance limit. SBI expects inflation to remain above 6 per cent for another month before declining.

However, exchange-rate stability, improving external conditions, prospects of de-escalation in the US-Iran conflict and the possibility of softer US Treasury yields have shifted the balance towards a 25-basis-point rate hike in December rather than a 50-bps increase, the report said.

The report noted that the rupee had moved back below Rs 94 per US dollar following the RBI's efforts to manage volatility. Foreign investor inflows have also reached around USD 7.65 billion since November 6.

SBI expects the terminal repo rate to settle around 6 per cent, with a downside possibility of 5.75 per cent. It said another rate hike in February would not be advisable, particularly with the Union Budget approaching.

El Niño Impact on Food Inflation

SBI also said concerns over El Niño's impact on food inflation could be overstated, with the effects likely to remain limited and concentrated in crops such as oilseeds, sugarcane and pulses.

(KNN Bureau)