Indian Oil Corporation (IOC) has raised the spot share of its crude purchases from 50% to nearly 84% as Middle East supply disruptions force India's state-run refiner to overhaul its sourcing strategy, according to Business-Today. IOC director (finance) Anuj Jain disclosed the increase on Saturday, saying the company tracks developments day to day and tries to optimise crude sourcing, as cited by Reuters.
West Asia conflict disrupts Hormuz and Red Sea flows
The move follows disruption to supplies through the Strait of Hormuz and the Red Sea after the start of the US-Iran war in late February, Business-Today reported. Indian refiners were pushed towards spot purchases as the conflict upended normal flows. IOC, which depends heavily on spot purchases of Russian crude, has also increased imports from West African and Latin American producers to make up for the disruption in supplies from the Middle East, Jain said, as cited by Reuters.
"Our spot volume jumped from 50% to almost 84%, and the situation is very very dynamic...we keep track of the development on a day-to-day basis and try to optimize our crude sourcing," Jain said, as cited by Reuters.
Higher crude costs hit quarterly earnings
The sourcing shift coincides with higher crude prices that hit June quarter profit. IOC reported a standalone net loss of Rs 2,661 crore for the April–June quarter, compared with a net profit of Rs 5,689 crore in the same period last year, Business-Today reported. Revenue from operations rose 26% year-on-year to Rs 2,75,972 crore from Rs 2,18,608 crore. In a press release issued on Friday, Indian Oil said, "Decrease in Profitability is mainly on account of rise in crude cost due to West Asia conflict."
| Metric | April–June 2026 | April–June 2025 | Change |
|---|---|---|---|
| Standalone net result | Rs 2,661 crore loss | Rs 5,689 crore profit | Swing to loss |
| Revenue from operations | Rs 2,75,972 crore | Rs 2,18,608 crore | +26% |
| Crude throughput | 19.165 MMT | 18.683 MMT | +3% |
| Refinery capacity utilisation | 109.4% | 106.7% | +2.7 pp |
| Pipeline throughput | 28.548 MMT | 26.256 MMT | +9% |
| Natural gas sales | 1.873 MMT | 1.685 MMT | +11% |
| Domestic market share | 43.1% | 41.5% | +1.6 pp |
Record throughput and market share
Even as profits came under pressure, IOC posted its highest-ever first-quarter crude throughput of 19.165 million metric tonnes (MMT), up 3% from 18.683 MMT a year earlier. Refinery capacity utilisation improved to 109.4% from 106.7%, while fuel and loss dropped to a record low of 8.04% in the post-BS VI era. The company's cross-country pipeline network recorded its highest-ever quarterly throughput at 28.548 MMT, up 9% from 26.256 MMT.
Petroleum sales rose 1% to 22.542 MMT during the quarter. IOC said its domestic market share increased to 43.1% from 41.5% a year ago. Sales of petrol (MS) and diesel (HSD) also reached record quarterly highs of 4.522 MMT and 10.866 MMT, respectively. Natural gas sales increased 11% year-on-year to 1.873 MMT from 1.685 MMT. The petrochemicals business reported better profitability, helped by higher sales of products such as LAB, BA, PTA and butadiene, while profit from the gas business also increased significantly during the quarter, according to Business-Today.
Refining expansion and outlook
IOC, along with its subsidiary Chennai Petroleum Corporation, accounts for about one-third of India's 5.2 million barrels per day of refining capacity, Business-Today reported. The company is moving ahead with plans to expand its refining business, and Jain added that IOC aims to process 1.7 million barrels of crude oil per day at its directly owned refineries in 2027-28. The company expects to expand the capacity of some refinery units by the end of this year, according to Business-Today.
For traders and procurement teams, the jump in IOC's spot share underscores how the US-Iran war and the disruption to flows through the Strait of Hormuz and the Red Sea have reshaped Indian crude buying, with West African and Latin American grades now supplementing Russian crude in the country's import basket, as reported by Business-Today.
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