MUMBAI, 22 December 2025: The proverb “Profit is not anyone's family's domain” proved Perfect fit for current crude oil movement. The Crude prices declined about 20% the last one year. In the second week of January-2025, the price of WTI crude oil was $ 79 per barrel, while the price of Brent crude oil was $ 82 per barrel.
In the past week, the price of WTI crude oil fell to $ 56 and the price of Brent crude oil fell to $ 60. It is time to "blacken hands" to investors or refiners who have traded bullishly in crude oil in a year. Crude oil prices have closed at a low level for the second consecutive week. Because there are reports that the supply of crude oil in countries, which are considered the leaders of the global market, is increasing at a record level. Experts believe that the supply of crude oil will remain high in the coming year 2026.
Kepler's figures say that currently 1.30 billion barrels of crude oil are going to various countries by sea. This is the first time since March 2020 that such a large quantity is reported to be in cargo. Everyone knows that in March-2020, crude oil prices went into negative territory due to Covid-19. Today, experts are now predicting that the price will show a level of $ 50. Currently, after Kepler's report that the stock of crude oil in floating storage has been 51 million barrels for 20 days, the alarm of recession.
In the global market, the dollar and gold are closely linked with the crude oil trade. Talking about India, the rupee is currently weakening against the dollar. But the government is calm as crude oil prices are also falling. Crude oil accounts for 25 to 30 percent of India's total import bill. Therefore, the low crude oil prices are giving a big relief to the currency.
Here is the maths. If India imports crude oil at a price of $55 per barrel and has to pay INR. 91 per dollar the cost per barrel (55 X 91 = 5005), then the purchase becomes cheaper for India. On the other hand, when India purchases crude oil at a price of $80 per barrel and has to pay a price of INR. 83 per dollar, the purchase becomes (80 X 83= 6640) expensive. Therefore, the current purchase can be considered cheap for India as on date. However, it is also true that as the price of crude oil goes down, India benefits. According to economists' estimates, if the price of crude oil remains at $50 per barrel for a long time, then India's import bill can be significantly reduced.
On the other hand, if India's agricultural exports increase, India is expected to benefit more because a weaker rupee generally benefits Indian agriculture exporters by making their products cheaper for foreign buyers, increasing competitiveness, especially for low-input/high-value items like spices, rice, and marine products. It will also benefit exporters as they earn more rupees for the same dollar earnings, boosting profitability and revenue. It will also benefit local farmers as exporters can buy at high cost from farmers. So, they will be excited to produce more. With new investment in the agricultural sector, agriculture will be modernized and the country's agricultural production will increase. As farmers' income increases, the auto sector will develop and India's overall growth rate will increase.
To control crude oil prices, Donald Trump tried to disrupt supply by stopping Venezuelan tankers but could not have much impact on the market. Apart from this, the UK also tried to show its power by imposing restrictions on Russia but it did not have any effect other than a short-term surge in crude oil prices. Experts say that China will find ways to receive crude oil from Venezuela. Moreover, China's economy is also so weak that it cannot afford to pay more money for the purchase of crude oil.
J.P. Morgan analysts say that both 2026 and 2027 will be recessionary years for crude oil. If this happens, Indians will say – AAPKE MUH ME GHEE SHAKKAR…!
By Kalpesh Sheth is an commodities expert with years of experience.
Image credit: shutterstock.com
