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There is no possibility of softening of crude oil prices, ADB’s prediction – inflation will continue for a long time

Sanjeev Kumar | May 10, 2026 2:23 PM CST

Crude oil.

Asian Development Bank i.e. ADB has presented such a scary picture, which has increased the tension of the entire world. ADB Chief Economist Albert Park has said that crude oil prices are likely to remain high for a long time due to disruptions caused by the Middle East crisis lasting longer than expected. Park told in an interview that considering the expectation of increase in oil prices, according to our new estimate, the average price in 2026 is expected to be $ 96 per barrel.

Even in 2027, it may remain at a high level of $ 80 per barrel. Therefore, we believe oil prices are likely to remain high for a long time. He said that future prices for next year appear to be higher than before. However, he said that we have always seen a kind of premium between spot market prices and nearby futures market prices, because there is a huge shortage of oil in the market right now.

India's inflation and GDP

Talking about the impact of the ongoing crisis in the Middle East on India, Park said that this will reduce the country's GDP growth by 0.6 percent, which will reduce it to 6.3 percent. Besides, inflation may also increase significantly in the current financial year. The Asian Development Bank (ADB) had in April projected that India's GDP growth would remain "strong" at 6.9 per cent in the current fiscal year driven by strong domestic demand, and rise to 7.3 per cent in the next fiscal year.

In terms of inflation, ADB had estimated it at 4.5 percent for the current financial year. Regarding India, Park said that our estimate is that growth will decline by 0.6 percent (FY27). This is based on the estimates of our model. But this will not have any negative impact on next year's growth. India will move forward rapidly again next year.

He said that this year inflation will increase by 2.4 percent to 6.9 percent. He said that this is slightly more than the impact of inflation in this region (Asia-Pacific), because India is more dependent on imported oil and gas. If China is excluded, the 0.6 percent decline in growth this year is very close to the average for the entire region. In a special update on April 29, ADB reduced the Asia-Pacific region's growth forecast for 2026 to 4.7 percent from 5.1 percent earlier. The reason for this is the long-running disruptions in West Asia.

effect of elnino

Asked about the impact of El Nino on food production, Park said that of course, it is very uncertain. Obviously, whenever crops fail in India, we face problems. Prices increase. India has a huge share in the global trade of rice. Therefore, whatever happens in India often has a big impact on other countries too. He further said that apart from rising fertilizer prices, this is also a cause for concern. He said that due to increase in fertilizer prices, farmers will use less fertilizer, which will reduce the yield and its availability will also reduce at the end of the year. He further said that this will definitely have an impact on food prices, but its extent will depend on the disruptions in gas supply.

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