India’s Top Refiner Cashes In as Oil Prices Slide

Core Viewpoint - Indian Oil Corporation (IOC) experienced a significant increase in net profit due to falling crude oil prices, which enhanced refining margins, resulting in a fourfold profit surge for the quarter ending December 31 compared to the previous year [1][2]. Financial Performance - Indian Oil reported a standalone net profit of $1.34 billion (121.26 billion Indian rupees) for the October-December quarter, marking a substantial increase from $318 million (28.74 billion rupees) in the same quarter of the previous fiscal year [2]. - The average gross refining margin (GRM) for Indian Oil during the period from April to December 2025 rose to $8.41 per barrel, more than double the $3.69 per barrel recorded for the same period in 2024 [4]. Market Dynamics - The decline in crude oil prices, particularly a drop of about $10 per barrel in the latter part of 2025, positively impacted refining margins for Indian refiners, including Indian Oil [2][3]. - Indian Oil and other refiners benefited from lower raw material costs and cheaper crude sourced from Russia, which contributed to increased profits [3]. Demand Trends - Total fuel demand in India surged to the highest level in six months in November 2025, driven by increased construction and agricultural activities following the monsoon season [4]. - December 2025 saw fuel demand reach a record high for a single month, further enhancing sales and earnings for refiners [3][4]. Future Outlook - There are concerns that Indian refiners, including Indian Oil, may face higher crude import prices in the future due to uncertainties surrounding Russian oil supplies, especially in light of the U.S.-India trade deal that may require India to reduce its oil imports from Russia [5].