News IOC Chairman Says Ample Crude Supply Keeping Oil Prices Stable Despite Geopolitical TensionsIOC Chairman Says Ample Crude Supply Keeping Oil Prices Stable Despite Geopolitical Tensions
Indian Oil Corporation Chairman A S Sahney stated at Davos 2026 that global crude supplies remain ample despite geopolitical tensions, keeping prices stable around $60 per barrel. The company is managing decent refining margins and implementing efficiency improvements to counter currency depreciation impacts. Government has provided ₹30,000 crore LPG subsidy support with clear payment visibility through October 2026. IOC is expanding into clean energy with major projects including a 10,000 tonnes green hydrogen plant at Panipat expected by December 2027.
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Indian Oil Corporation Chairman A S Sahney provided insights on global crude oil markets and the company's strategic direction during an exclusive interview at the Davos World Economic Forum 2026. Speaking on the sidelines of the event, Sahney emphasized that despite ongoing geopolitical tensions worldwide, crude oil supplies remain adequate, contributing to price stability.
Global Crude Supply and Price Dynamics
Sahney highlighted that global crude oil markets continue to be well-supplied, which has helped maintain price stability despite various disruptions. The following table summarizes the current market conditions:
| Parameter: | Current Status |
|---|---|
| Crude Oil Price: | Around $60 per barrel |
| Supply Status: | Ample quantity available |
| Diesel Refining Margin: | $18-19 |
| Motor Spirit Margin: | $10-12 |
| Crude Price Range for IOC: | $60-64 (manageable for bottom line) |
"Yes, supplies are there, and supplies are in ample quantity as of now," Sahney stated, noting that crude prices have largely hovered around the $60 per barrel mark despite wars and disruptions. He emphasized that geopolitics remains the primary factor preventing oil prices from declining further, suggesting that without these tensions, prices could fall below $60.
Refining Operations and Profitability
The company is currently experiencing supportive refining margins across key products. Sahney indicated that with diesel margins at $18-19 and motor spirit margins at $10-12, combined with crude prices in the $60-64 range, Indian Oil Corporation can maintain proper bottom line performance. However, he acknowledged the negative impact of rupee depreciation on profitability, given the company's heavy reliance on dollar-denominated crude imports.
Transformation and Efficiency Initiatives
To counter currency pressures, Sahney outlined a comprehensive transformation strategy focused on operational efficiency. The company is implementing improvements across multiple areas:
- Refinery efficiency enhancements
- Supply chain optimization
- Ecosystem-wide operational improvements
- Structural profitability support measures
"This will be a different Indian Oil going forward," Sahney emphasized, indicating that the improvements target year-on-year performance rather than quarterly fluctuations.
Government Support and Subsidies
Regarding LPG subsidies, the government has provided significant support to the industry. The following table outlines the subsidy framework:
| Subsidy Details: | Information |
|---|---|
| Total Support Package: | ₹30,000 crore |
| IOC's Share Received: | 50% (₹15,000 crore) |
| Payment Schedule: | Monthly basis |
| Payment Period: | November 2025 to October 2026 |
| Visibility: | Clear support for next year |
Sahney confirmed that payments began in November 2025 and will continue through October 2026, providing the company with clear visibility on government support over the coming year.
Clean Energy and Future Projects
The company is actively expanding its clean energy portfolio, though Sahney noted that returns from renewables remain lower but stable. Solar and wind projects provide approximately 13-14% return on equity, which he described as sustainable for 25 years once invested. Indian Oil Corporation is diversifying into several clean energy segments:
- Compressed biogas production
- Ethanol including second and third-generation varieties
- Green hydrogen development
- Sustainable aviation fuel (SAF) production
Notably, the company is constructing India's largest green hydrogen plant at Panipat with a capacity of 10,000 tonnes per annum, expected to be operational by December 2027. Additionally, Indian Oil Corporation is currently the only company in India certified to produce sustainable aviation fuel, with dispensing capabilities expected by May or June, ahead of the blending mandate.
Historical Stock Returns for Indian Oil Corporation
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.90% | -1.97% | -4.66% | +2.66% | +19.54% | +144.56% |
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