Benchmark crude values climbed to around $110 a barrel, driven by a combination of heightened geopolitical tensions and mounting uncertainty over available supply. Brent crude climbed 3.7 per cent over the week, notching a second straight weekly gain as unease over threats to energy infrastructure across the Middle East and the ongoing Russia-Ukraine war kept upward pressure on prices.
Oil market participants are pricing in the prospect of renewed supply disruptions, even though crude volumes moving through the Strait of Hormuz have climbed back toward the levels seen before hostilities began. Prices for the crude oil basket tied to India's imports have held at elevated levels.
Crude priced under the Indian Basket benchmark averaged $122.01 a barrel through October 2026, up from the $116.09 recorded a month earlier in September. Tallied across the days completed in October, that monthly average reflects partial-period data, while a separate reading placed the Indian Basket at $119.39 a barrel on 15 October.
Serving as a composite price benchmark, the Indian Basket index tracks the weighted mix of crude oil grades that Indian refineries bring in from overseas suppliers. Brent Dated feeds into the formula as the sweet crude benchmark, while an average drawn from Oman and Dubai prices supplies the sour crude side of the calculation.
Barrel prices across the 2026-27 financial year traced a V-shaped arc: opening at $114.48 in April, they retreated through May ($106.23), reached a trough across June and July ($83.22 and $82.04 respectively), before climbing back through August ($90.19), September ($116.09), and an October average of $122.01 recorded to date.
Priced at $82.04 per barrel, the Indian Basket touched its July low before turning upward. By October, the average had climbed to a level nearly 49 per cent above that July figure. Compared with September's reading, the October figure ran roughly 5.1 per cent higher.
Unease over the stability of fuel supply chains has worked its way through oil markets around the globe. Drone and missile exchanges between Houthi forces and Saudi Arabia have persisted alongside reciprocal strikes on power and fuel networks in the Russia-Ukraine conflict. Uncertainty over oil supplies has gripped energy markets, driven by unresolved instability across the Persian Gulf region.
Eurasia Group put the probability of the conflict deepening at 65 per cent, nearly double its earlier estimate of 35 per cent, with analysts noting in a written assessment that the current standoff had become untenable for Washington and that further escalation appeared the more likely path forward. Separately, up to 17 million barrels from the Strategic Petroleum Reserve were made available by the United States in a bid to take pressure off energy markets.
Legislation put forward by members of Congress sought to prevent a deal that would have allowed hundreds of millions of barrels of Russian diesel to enter circulation. Questions about whether Russian diesel will remain accessible, and how ongoing strikes against refining infrastructure might weigh on supply, have left traders factoring geopolitical risk back into their calculations — a dynamic Rebecca Babin, a senior energy trader at CIBC Private Wealth Group, described as oil markets reassessing their exposure after a period of relative calm, particularly with a weekend approaching.
Prolonged upward movement in crude oil prices puts pressure on what the country pays for imports, widens the gap in its trade account, and complicates the path for keeping inflation in check. As a net importer of crude oil, India's energy budget is tied to the ebb and flow of global commodity prices, where any upward shift in those rates translates directly into a heavier draw on the country's foreign exchange reserves.
Prolonged elevation of commodity prices would place additional strain on India's current account balance, with knock-on effects likely to drag on the rupee's value. Forecourt prices for drivers depend on how tax structures are designed by governments, what domestic price controls regulators put in place, and how much of any change in production costs oil companies choose to absorb rather than pass on to consumers.
When petroleum prices climb, the added cost flows downstream into sectors that depend on oil-derived inputs — among them airlines, freight carriers, logistics networks, and factory operations. Oil benchmarks have climbed by more than 75 per cent over the course of the year, with armed conflicts across the Middle East and Russia weighing on the flow of energy to global markets.
Petroleum derivatives joined the rally, with European diesel contracts on futures markets climbing to more than twice their level from a year earlier. Pricing in this part of the commodity market tracks closely with shifts in physical availability, the cost of moving cargo, and trader expectations around how far geopolitical tensions may yet run.
