$100 Brent Crude Prices Unlikely to Sustain: Expert

Brent crude prices hovering near $100 per barrel have raised concerns over India's inflation and current account deficit. According to experts, sustained rally above this mark is unlikely due to aggressive competition among global oil producers.

India, one of the world's largest crude oil importers, remains vulnerable to higher global crude prices as they increase the country's import bill and put pressure on the rupee and the current account deficit. The RBI's latest bulletin shows that India's crude oil basket price eased sharply to $75.6 per barrel in July from a peak of $114.5 per barrel in April.

However, experts believe that Brent crude may briefly cross the $100 per barrel mark if geopolitical tensions and supply-side uncertainties intensify. Sourav Choudhary, Managing Director of Raghunath Capital, said 'For India, the immediate concern is obvious. A higher oil price increases the country's import bill, puts pressure on the current account deficit, and weighs on the rupee due to higher dollar outflows.'

Choudhary added that global oil producers are competing aggressively for market share, with several exporting nations continuing to offer crude at discounts to Brent. This should help cap any sustained rally. He also highlighted the risks of persistently high oil prices, saying 'The real challenge would emerge only if Brent remains above $100 per barrel for an extended period.'