Indian Oil Corporation swung to a quarterly loss as a sharp jump in crude prices squeezed refining and marketing margins. The state refiner's borrowings rose and spot crude purchases surged as it shifted sourcing away from the Middle East. Refinery and pipeline operations still ran at high utilization even as the bottom line turned negative.
Crude price swing wipes out a profitable quarter
Indian Oil Corporation reported a net loss of Rs 2,661 crore for the quarter ended June 2026, reversing a profit of Rs 11,378 crore in the prior quarter and Rs 5,689 crore a year earlier. Management attributed the swing to a sharp rise in crude oil prices that squeezed retail fuel margins and produced inventory losses.
The Indian Crude Basket averaged $100.74 a barrel during the quarter, up 21.4% from $83.01 the prior quarter, as U.S.-Iran conflict risks disrupted supply routes.
Revenue nonetheless climbed, since higher product prices lifted the top line even as profitability collapsed. Revenue from operations rose 26.2% year over year to Rs 275,972 crore, the company said.
Refining margins narrow despite steady output
Gross refining margin fell to $15.59 a barrel net of a special additional excise duty, which management said would have been about $36 a barrel excluding that impact. Refinery throughput held at 19.2 million tonnes with capacity utilization of 109.4%, a step down from 19.7 million tonnes and 113.9% the previous quarter.
Pipeline throughput, however, set a quarterly record of 28.5 million tonnes, up from 27.7 million tonnes. Total sales volume still slipped 4.1% sequentially to 26.211 million tonnes.
Spot crude purchases surge as sourcing shifts
Spot crude purchases rose to 84% of total procurement, up from 51% a year earlier, as Indian Oil increased sourcing from Russia, Venezuela, South America and West Africa. The shift responds to Middle East disruption that has elevated freight, insurance and sourcing costs, particularly the U.S.-Iran conflict.
Anuj Jain, Indian Oil's director of finance, said on the earnings call: "If you see Indian Oil today has an energy basket share of around 9%-10%."
Debt climbs as capital spending stays elevated
Borrowings jumped to Rs 141,453 crore from Rs 110,668 crore at the end of March, a 28% increase driven by higher working capital needs. The company spent Rs 6,461 crore in capital expenditure during the quarter and kept its full-year target at Rs 32,700 crore, part of a Rs 30,000-40,000 crore annual plan as refinery expansions near completion.
Management still expects refining throughput to reach about 90 million tonnes by FY 2029, even as near-term margins stay exposed to crude swings.
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