Key Points
Lower Brent crude prices expected to support Indian oil marketing companies
Gross refining margins predicted between USD 5-6.8 per barrel
EBITDA anticipated to rise in financial year 2025-26
Demand growth remains steady despite geopolitical uncertainties
EBITDA is earnings before interest, taxes, depreciation, and amortisation.
The global rating agency expects the oil companies' gross refining margins to hover around USD 5 per barrel to USD 6.8 per barrel and for marketing margins to remain healthy in 2025-26.
Brent crude is currently trading at USD 75.76 per barrel, publicly available data showed.
The refining margins would be aided by lower crude oil prices, improving demand and slower net capacity growth.
India Oil Corporation Ltd, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited reported gross refining margins of USD 3.7 per barrel to USD 6.0 per barrel in the first nine months of 2024-25, compared to the unusually high levels of USD 9.1 per barrel to USD12.1 per barrel in 2023-24.
Fitch's Brent price assumptions reflect the impact of OPEC+'s large spare capacity, increasing global production and moderating demand growth.
However, heightened volatility in crude prices given geo-political considerations, and uncertainties around how the US's future energy and tariff policies may have an impact on energy demand.
Soon after assuming office, US President Donald Trump laid out an aggressive plan to maximize oil and gas production, including filling the strategic reserves. Besides, he declared a national energy emergency, besides withdrew from the international pact to fight climate change.
Addressing virtually the World Economic Forum Davos, Trump called on Saudi Arabia and OPEC countries to lower oil prices.
