Page 17 - Policy Economic Report- June'26

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

infrastructure, computing capacity, skilled human resources, and regulatory frameworks, which could
widen productivity and income gaps if left unaddressed.

Figure 8: U.S. AI- and Technology-Related Imports (12-Month Rolling Sum), 2016–2026

Source: S&P Global

The World Bank emphasizes that realizing the full economic benefits of AI will require sustained
investment in digital infrastructure, education and workforce reskilling, research and innovation, and
effective governance frameworks. While AI is unlikely to offset structural economic challenges in the near
term, its widespread adoption is expected to play an increasingly important role in improving productivity,
enhancing industrial competitiveness, accelerating innovation, and supporting sustainable long-term
global economic growth.

3. Oil Prices expected to remain elevated despite Middle East ceasefire - S&P Global Market
Intelligence

The ceasefire agreement between the United States and Iran and the proposed reopening of the Strait of
Hormuz have eased immediate concerns regarding disruptions to global oil supplies. Nevertheless, S&P
Global cautions that the economic consequences of the Middle East conflict are far from over, with crude
oil prices expected to remain significantly above pre-conflict levels throughout 2026. Although the
agreement has improved market sentiment and reduced geopolitical risk premiums, the restoration of
normal production and export operations across the Gulf is likely to be gradual. Production facilities,
export logistics, and regional shipping networks continue to face operational constraints, while the recent
drawdown in global crude inventories has limited the market's ability to absorb supply shocks.

Reflecting these developments, S&P Global projects the average price of Dated Brent crude at US$110 per
barrel in 2026, nearly 90 % higher than its pre-conflict assumption made in February 2026. Prices are
expected to ease only gradually during 2027 as production normalizes and supply chains stabilize.
Elevated crude prices are likely to sustain inflationary pressures globally by increasing transportation,
manufacturing, and energy costs while also widening current account deficits for oil-importing economies.

June 2026 Page | 16