New Delhi

Ongoing geopolitical tensions and disruptions in global energy supply are likely to keep crude oil prices elevated, posing sustained challenges for India’s oil and gas sector, according to a report by Ambit Capital.

In its report titled “India’s Energy Compass: The Strategic Shift (2015–2029)”, the firm noted that the global energy landscape has entered a phase of deep uncertainty following the recent Middle East conflict 2026.

The report highlighted that strikes on vital infrastructure have significantly disrupted supply chains, leading to the loss of substantial refining capacity and a sharp decline in liquefied natural gas (LNG) output from Qatar. It warned that restoring these facilities could take several years.

Further compounding the situation, shipping disruptions—particularly around the Strait of Hormuz—have severely curtailed maritime movement. With transit through the route drastically reduced, shipments are being rerouted via longer paths such as the Cape of Good Hope, driving up freight costs considerably.

As a result, crude oil prices are expected to remain structurally high in the near term. The report estimates that Brent crude could stabilise in the range of $80–$100 per barrel, supported by a global supply deficit and the need for countries to rebuild strategic reserves.

It also cautioned that geopolitical risk premiums are likely to persist for several years, delaying a full stabilisation of global energy markets.

Amid these challenges, India is actively seeking to diversify its energy sources and reduce dependence on volatile regions. The report pointed to initiatives by Reliance Industries, including overseas partnerships aimed at securing long-term hydrocarbon supplies.

However, elevated crude prices could strain the financial health of oil marketing companies, especially if retail fuel prices remain controlled. This could squeeze profit margins and impact their balance sheets over time.

READ MORE: Pilot Hana Mohsin Khan defies social and religious stereotypes

Overall, the report concludes that shifting geopolitical dynamics and supply disruptions are reshaping India’s energy strategy, pushing the country towards diversification and long-term partnerships to mitigate risks in an uncertain global market.