Top Indian Refiner Sees Oil Prices Stabilizing in the $65-70 Range

State-owned Indian Oil Corporation, the biggest refiner in India, expects international crude oil prices to stabilize in the $65 to $70 per barrel range for the rest of the fiscal year, with potential dips below $65 a barrel, IndianOil chairman AS Sahney told the NDTV Profit outlet on Monday.

“There is still some room for it to go downwards. What I see is very much near to $65, plus or minus one or two dollars, is the right place where we will be comfortable,” Sahney told NDTV Profit.

The market is oversupplied today and there is also a view that “there is much more supply which is still expected to come,” the executive added.

The current oil price, with Brent Crude in the high $60s per barrel, is the “right place” for crude prices, according to Sahney.

Indian Oil’s view on oil prices is echoed by many analysts, who don’t see much room for oil topping $70 per barrel for a sustained period of time in view of OPEC+ aggressively unwinding the oil production cuts and uncertain macroeconomic and trade developments in the near term.

The strong and unique price advantage of discounted Russian crude has diminished for India compared to other crude grades now that the international benchmark prices are in the $65 to $70 a barrel range, the executive told NDTV Profit.

The share of IndianOil’s imports from Russia at 20-24% of all crude purchases is lower than the average for India, which is up to 35% now, IndianOil’s chairman noted.

“We are more open to crudes from newer sources also because that gives me a better energy security paradigm,” Sahney said.

Once spending on refinery expansions is completed, IndianOil will invest in petrochemicals capacities as it has the cost advantage of using naphtha and natural gas from its refinery outputs as feedstock, according to the executive.

Credit: Oilprice.com