Crude oil prices slide 8% YTD, India weighs gains and risks

Crude oil prices have declined by about 8% year-to-date, raising concerns about global demand and supply dynamics. Weak economic signals from major economies and easing geopolitical risks have weighed on market sentiment. Analysts say traders are closely watching OPEC’s next move and US inventory trends.

Sneha Jain, Investment manager on smallcase and Founder and CEO of WealthTrust Capital, said, "WTI Crude oil prices are currently trading about 8% lower year-to-date, driven by a combination of global and regional factors. Softer demand expectations from major economies, particularly China and Europe coupled with rising non-OPEC supply, have weighed on prices."

Adding to it, Hardik Shah, Director, CareEdge Ratings, says, "Key reason for lower crude oil prices is OPEC unwinding its production cuts, its recent announcement to now increase the production from October 2025, while US President Donald Trump’s trade war weighs on demand. With these, crude oil prices are likely to remain benign in the near future."

She added that a relatively stable geopolitical environment and higher U.S. shale production have contributed to easing supply-side pressures. On the demand front, lingering concerns around global growth and energy transition policies have kept upward momentum in check.

Sanjay Kumar, CEO & MD, Rassense Pvt Ltd, said, "Crude oil prices have eased recently, though the decline looks cyclical and may not be sustainable. Brent is around $67 per barrel, down nearly 11% from July’s ~$80 peak, while WTI trades near $63, down 8%. However, the rupee’s depreciation to ₹88 per USD offsets much of the benefit for India, which imports over 85% of its crude requirements."

For India, net importer of over 85% of its crude needs, this downturn is largely a positive signal. Jain explained, "Lower import costs could save the economy upto $13 billion annually for every $10 per barrel drop, easing the current account deficit and bolstering foreign exchange reserves. It mitigates inflationary pressures on fuel, transportation and manufacturing sectors, potentially enabling retail price reductions in petrol and diesel by ₹2-3 per liter, thereby supporting consumer spending and GDP growth."

Naturally, lower crude oil prices favour India, which is the world’s third-largest importer of crude oil. "Lower crude oil prices had a positive economic impact on India with a decline in crude oil import bill by 18% y-o-y to $40.4 billion in 4MFY26 (April-July 2025) vis-à-vis $49 billion in 4MFY25, whereas import volumes remained largely flattish for this period at 81.2 MMT in 4MFY26 vis-à-vis 81.7 MMT for 4MFY25," said Shah.

However, policymakers are also weighing long-term strategies. Kumar stressed that energy diversification is essential. Jain pointed to encouraging progress, noting that renewables now make up nearly 30% of India’s installed power capacity. This growth, she said, positions the economy better to manage future demand while cushioning the impact of oil price swings.

For now, India enjoys a window of relief from lower crude prices, but both experts agree that volatility remains a constant. As Kumar put it, “The current softness in oil may be temporary. India must use this period to strengthen its energy security and prepare for the inevitable turn in the cycle.”