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MK Surana, former CMD of HPCL, forecasts that oil will likely stay below the $65 zone as the immediate threat of military conflict recedes. Surana also noted that Indian oil companies remain well-positioned due to strong margins and volumes.
By Alpha Desk January 16, 2026, 1:22:59 PM IST (Published)
In an interview to CNBC-TV18, Marko Papic, Chief Strategist at BCA Research, and MK Surana, former CMD of Hindustan Petroleum Corporation Limited (HPCL), highlighted that while near-term fears have eased, medium-term risks for oil prices remain skewed to the upside.
Oil prices have fallen sharply in the last two days, dropping nearly 6%, as markets reassessed the chances of immediate military action against Iran.
According to Papic, the oil market entered the year with very bearish positioning. Floating storage was high, and traders expected more supply from places like Venezuela. That optimism, he said, was overdone. The bigger concern now is Iran.
While acknowledging that the immediate risk of US military action against Iran has diminished, he pointed to a more potent, uncontrollable factor: domestic unrest within Iran.
"Iran is undergoing very significant protest and those protests could get out of hand and eventually they could cause domestic political chaos that's really uncontrollable," Papic stated.
"I still think that from a geopolitical perspective, there is upside risk to oil prices over the next month or so," he concluded.
Read Here | Oil stabilises post major drop of 6% in 2 days after US 'postpones' attack on Iran
Offering a more moderate view, Surana, suggested that oil prices will likely remain contained. He agreed that the initial hard-line stance on Iran had added a risk premium, but the subsequent softening of rhetoric led to a significant price drop.
Surana contended that a US military intervention in Iran would be far more complex than in Venezuela due to Iran's superior military capabilities and determined regime. He also noted that key Arab nations are lobbying against a conflict to protect regional trade.
"I would assume that the market will factor in and the oil prices… will remain below $65 zone ," Surana projected, while acknowledging the existence of upside risk if the situation escalates unexpectedly.
Read Here | Mixed performance likely for oil and gas in third quarter of FY26
On the domestic front, Surana offered a reassuring perspective for investors in Indian oil companies. He assessed that the sector is well-positioned to navigate the current environment.
"As far as the Indian companies are concerned, as far as the investors are concerned, the marketing margins are good, the refining margins are good, the volumes have been good… and therefore I think the oil companies in India are well-placed," he explained.
For the entire discussion, watch the accompanying video
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