Oil Jitters: Indian Crude Basket Hits Nearly $116/Barrel On West Asia Heat; Brent Forecast Raised

India's crude oil basket surged to nearly $116 per barrel on Sept. 9, as escalating tensions in West Asia and disruptions to shipping through key waterways raised concerns over global oil supplies and added to inflationary pressures. The Indian crude oil basket stood at $115.98 per barrel on Thursday, according to the latest data from the Petroleum Planning and Analysis Cell (PPAC).

The Indian crude basket is a derived mix of sour grades, comprising the Oman and Dubai average, and the sweet grade Brent dated, processed by Indian refineries. The basket has also witnessed a sharp increase on a monthly average basis. India's crude basket has averaged $104.09 per barrel so far in September, up 15.41% from the $90.19 average recorded in August.

The sharp rise comes amid an escalation in the US-Iran conflict and disruptions to shipping, raising concerns about the impact of higher energy prices on inflation, economic growth and India's import bill.

Brent Forecasts Raised

The surge in crude prices has prompted several global and domestic analysts to raise their oil price forecasts. HSBC has raised its forecast for average Brent crude prices in 2026 to $90 per barrel from $80 previously, citing risks to shipping through the Strait of Hormuz.

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Choice Institutional Equities expects Brent to average $84 per barrel in FY27 and $86 per barrel during the July-September quarter. Goldman Sachs on September 8 raised its Brent forecast to $85 per barrel for December 2026 and $80 per barrel for 2027. The brokerage also warned that crude prices could rise to as high as $120 per barrel if attacks on shipping increase.

Brent Surges To Highest Level Since May

Brent crude futures for November delivery climbed to a high of $101.94 per barrel earlier on Thursday, as disruptions at key shipping chokepoints threatened global crude flows. Brent has surged more than 13% so far this month and has risen nearly 70% year-to-date, putting it on track for its biggest year-to-date gain since 2009. The benchmark has also advanced for a fifth consecutive session.

The latest rally has brought the geopolitical risk premium back into the oil market, with concerns extending beyond shipping disruptions to potential physical damage to refining and production infrastructure in the Gulf. The Strait of Hormuz has emerged as a key risk for global energy markets. Any sustained disruption to flows through the strategic waterway could have significant implications for crude supplies and prices.

Iran has threatened to intensify the conflict, while oil flows through Hormuz have reportedly fallen sharply.

Another key risk is the Bab el-Mandeb Strait, where Yemen's Houthi movement is increasing pressure around the strategic Red Sea shipping route. Any further disruption could add to freight costs and complicate global energy shipments.

At the same time, increased Chinese buying is tightening physical oil markets, adding another layer of support to crude prices.

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