Indian Oil To Bharat Petroleum: Oil Firms To Benefit From Festive Demand — Here's How

HSBC Global Research shared positive outlook on Indian oil marketing companies, noting that lower Brent prices and a bounce-back in auto fuel sales due to festive demand are supporting the profitability of Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp.

Brent crude prices between $70-75 per barrel are favourable for OMCs' profitability, with refining spreads improving from late October. While OPEC+ has postponed its planned production increase, Brent prices remain around $72 per barrel, reflecting both demand concerns and supply risks. 

This lower Brent scenario supports OMC profitability by keeping fuel pump prices stable. HSBC’s global oil team forecasts Brent prices to average $73 per barrel in the fourth quarter of fiscal 2025 and decline to $70 per barrel in 2025, though supply disruptions may add short-term price pressures. 

India’s auto fuel sales rebounded following a slower couple of months, driven by increased economic activity and festive demand. Diesel demand grew 0.1% year-on-year in October, reversing declines from August and September, while gasoline demand surged 8.7% in October. Aviation turbine fuel saw a YoY rise of 9.4%, surpassing pre-Covid levels, as travel activity picked up. The overall demand for all petroleum products grew 2.9% YoY in October.

Diesel and gasoline, key to India’s petroleum demand, showed resilience in October, according to HSBC. Diesel, which makes up approximately 38% of India’s total petroleum consumption and nearly 70% of auto fuel demand, bounced back slightly after two months of weather-related declines. Gasoline demand, bolstered by a growing share of gasoline-powered vehicles, rose 8.7% YoY.