Barclays: Delay in Hormuz flow recovery poses upside risks to $85/b Brent forecast

Geopolitical tensions impacting crude oil supply routes directly affect India's import bill and inflation. Higher crude prices are a significant headwind for net oil importers like India.

Monitor crude oil price movements closely; a sustained breach above $85/b could trigger selling pressure in OMCs and airlines, while supporting upstream oil & gas stocks.

For Indian markets, this story mainly matters for IOC, ONGC, OIL and the Oil & Gas, Aviation, Automobiles pocket. The current signal is bearish, so traders should look for follow-through in price, volume, and sector breadth instead of reacting to the headline alone.

Watch whether the next market session confirms the setup described here: Higher crude oil prices increase input costs for OMCs, potentially squeezing margins. Higher crude oil prices directly benefit upstream oil producers due to better realizations. Also track volume confirmation, sector participation, and whether the move holds beyond the first reaction.

• •Barclays forecasts Brent crude oil to average $85 a barrel in 2026.
• •Delays in restoring traffic through the Strait of Hormuz or further escalation could push prices higher.
• •A swift normalization of flows aligns with the $85/b forecast.
• •Risk flag: Geopolitical escalation in the Middle East
• •Risk flag: Sustained weakness of the Indian Rupee against the US Dollar