Indian Oil Increases Spot Crude Purchases Amid Middle East Supply Disruptions
Supply disruptions in the Middle East have led Indian Oil Corporation (IOC) to significantly alter its crude sourcing strategy. The state-run refiner has increased its spot market purchases from 50% to nearly 84%, according to IOC’s director of finance, Anuj Jain. This shift follows supply interruptions through the Strait of Hormuz and the Red Sea, which began with the US-Iran conflict in late February.
In response to these disruptions, IOC has also ramped up imports from West African and Latin American producers to compensate for the reduced availability of Middle Eastern crude. Jain noted that the situation remains dynamic, with the company monitoring developments closely to optimize its crude sourcing strategy. IOC, along with its subsidiary Chennai Petroleum Corporation, accounts for approximately one-third of India’s total refining capacity of 5.2 million barrels per day.
Financial Performance Amid Rising Costs
IOC reported a standalone net loss of Rs 2,661 crore for the April-June quarter, a stark contrast to a net profit of Rs 5,689 crore during the same period last year. Despite the loss, revenue from operations increased by 26% year-on-year, reaching Rs 2,75,972 crore, up from Rs 2,18,608 crore. The company attributed the decline in profitability primarily to rising crude costs linked to the ongoing conflict in West Asia.
Despite the financial challenges, IOC achieved its highest-ever first-quarter crude throughput of 19.165 million metric tonnes, a 3% increase from 18.683 million metric tonnes a year earlier. Refinery capacity utilization improved to 109.4%, and the company’s cross-country pipeline network recorded its highest quarterly throughput at 28.548 million metric tonnes, up 9% from the previous year.
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