Crude Oil Prices Stay Flat Amid Global Surplus
Crude oil prices are holding steady between $60 and $70 per barrel in October 2025, a narrow range that masks deeper tensions in the global oil market. The International Energy Agency (IEA) warns of a growing surplus as supply outpaces demand, creating both opportunities and challenges for oil-hungry nations like India.
India, the world’s third-largest oil consumer, imports over 85% of its crude, making it sensitive to global price swings. While stable prices ease fuel costs for millions of Indian drivers, they squeeze refinery profits and government tax revenues. Experts say this calm could be short-lived, with geopolitical risks and the global shift to renewables adding uncertainty.
Current Price Snapshot
New data from October 11 shows:
- WTI Crude: $62.30 per barrel, down 1.2% this week.
- Brent Crude: $64.50 per barrel, flat since September.
- Indian MCX Futures: ₹5,450 per barrel, steady despite rupee pressures.
This tight $60-70 band, unchanged since July, contrasts with 2024’s volatility when Brent hit $90. The IEA’s September 2025 report projects a global supply of 106.9 million barrels per day (mb/d), against a demand of 103.4 mb/d, signaling a surplus that keeps prices low.
Why Prices Are Stuck: Three Key Drivers
1. Oversupply Floods the Market
Global oil production is booming. The IEA estimates a 2.7 mb/d supply increase in 2025, led by non-OPEC countries like the United States (1.2 mb/d growth), Brazil, and Guyana. OPEC+ raised output by 180,000 barrels daily in September, with Saudi Arabia and Russia exporting 9.5 mb/d combined, per Reuters.
Demand, however, is sluggish. Growth is pegged at 700,000 barrels daily, mostly from Asia, while China’s economic slowdown caps its 15 mb/d consumption. “We’re swimming in oil,” said Bob McNally of Rapidan Energy Group in a Bloomberg interview. The result? A 1.5 mb/d surplus by December, pushing prices down.
2. Geopolitical Tensions Fail to Ignite Prices
Middle East conflicts, including Houthi attacks on Red Sea shipping, add a $2-3 risk premium, per S&P Global. Yet, robust US production and Russia’s steady exports to India and China neutralize the impact. US-China trade disputes, with new 25% tariffs proposed by President Trump, spare oil markets for now. Russia’s discounted crude, 35% of India’s imports, flows uninterrupted despite sanctions.
“Geopolitics is a shadow, not a storm,” Ellen Wald of Transversal Consulting told Reuters. This balance keeps prices from spiking.
3. Energy Transition Slows Demand
The global push for clean energy is reshaping oil demand. The IEA reports 18 million electric vehicles (EVs) sold in 2025, cutting oil use by 1 mb/d. Europe’s carbon taxes and the US’s $370 billion renewable investments accelerate the shift. China’s 300 GW solar-wind addition and India’s 50 GW renewable growth further dampen oil reliance.
“Oil demand may peak by 2030,” said IEA’s Fatih Birol in June. For India, aiming for net-zero by 2070, this means a gradual shift, though oil and coal dominate for now.
India’s High Stakes in the Oil Game
India consumes 5.5 mb/d of oil, importing $143 billion worth annually, per the Petroleum Ministry. At $65 per barrel, this saves Rs 50,000 crore compared to $90 highs, easing inflation to 4.5%, per RBI estimates.
But there are downsides:
- Refiners Struggle: Indian Oil, Reliance, and BPCL face crack spreads of $5-6 per barrel, down from $15, per Economic Times. Q1 FY26 profits fell 10-15%.
- Tax Revenue Dips: Fuel taxes, 50% of pump prices, dropped 5% year-on-year, squeezing budgets.
- Investment Delays: Projects like HPCL’s Ratnagiri refinery face 2027 delays due to low margins.
Consumers benefit, with petrol at Rs 95/liter and diesel at Rs 85 in Delhi. “Low prices are a lifeline for commuters,” said Mumbai driver Anil Sharma. The government is stockpiling 13 million barrels, aiming for 15 by year-end, per PM Modi’s G20 directive.
Voices from the Field
“The oil market’s on a tightrope – surplus grows, but shocks could change it,” said Keisuke Sadamori of IEA in the September report.
Hareesh V, energy analyst at Economic Times, advised: “India should stockpile crude and double down on renewables now.”
OPEC’s Haitham Al Ghais said post-hike: “We’re stabilizing growth, not flooding.” But Goldman Sachs’ Daan Struyven warned: “Brent could hit $55 by 2026 if China falters.”
Mukesh Ambani of Reliance, at APPEC 2025, said: “Low prices fund our Rs 1 lakh crore green hydrogen push.”
A Chennai refinery worker shared: “Work’s steady, but profit cuts scare us. Jobs could go.”
Global Ripples and India’s Next Steps
The US leads exports at 4.5 mb/d, while Russia’s 35% share of India’s imports grows. China’s 10 mb/d stockpile in Q3, per S&P Global, delays demand peaks. Europe’s renewable push leaves gaps.
India’s rupee at 84/USD holds, cushioned by low oil prices. Energy stocks dip 5%, but auto shares rise on cheaper fuel. COP30 in Brazil looms, eyeing oil caps.
FAQs: Your Oil Price Questions Answered
Q1: Will crude prices stay in the $60-70 range through 2025?
A: Likely, per IEA’s September report, with surpluses at 1.5 mb/d. But EIA predicts Brent at $52 by 2026 if demand weakens. A Red Sea crisis could add $10 fast. China’s GDP growth is key – a 1% drop cuts 200 kb/d demand.
Q2: How do these prices affect fuel costs in India?
A: Petrol stays at Rs 95-100/liter, diesel Rs 85 in metros. Stable prices keep inflation low at 4.5%. Rupee dips may add Rs 1-2, but no major hikes unless taxes rise. Farmers save 5-7% on diesel.
Q3: Why are Indian refiners struggling despite low prices?
A: Crack spreads are $5-6/bbl, down from $15, per Economic Times. Profits fell 10-15% in Q1 FY26 due to inventory losses. Low margins delay projects like Ratnagiri refinery, risking 50,000 jobs.
Q4: Is India’s 85% oil import reliance risky?
A: Yes, up from 82% in 2024, per Petroleum Ministry. Russia’s 35% share is stable but volatile. Solutions: Boost reserves to 15 mb/d by 2026, increase ONGC output, aim for 30% EV sales by 2030 to cut 500 kb/d.
Q5: Will the energy transition end oil demand soon?
A: No, but it’ll plateau at 105 mb/d by 2030, per IEA. EVs cut 2 mb/d by 2027. Oil’s 2 million jobs in India face shifts; renewables add 1 million by 2027 with retraining.
Q6: What’s the upside for India in this price range?
A: Saves $10 billion on imports, cools inflation by 0.5%, frees RBI for growth loans. Stockpile reserves, fund green bonds. “Breathe easy, build smart,” says Hareesh V.