Will comply with all international sanctions: IOC Chairman A S Sahney

India's state-run oil refiners procure crude oil from Russia from the spot market through traders, shielding the companies from direct impact of the US sanctions

State-run Indian Oil Corporation Ltd (IOCL) would abide by the sanctions imposed by the international community, its Chairman A S Sahney said on Monday. He was speaking to the media on the occasion of the company's second quarter financial results announcement.

 

The comments by India’s largest oil marketing company (OMC) comes amid the US sanctioning two major Russian oil firms — Rosneft and Lukoil — which produce around 60 per cent of the total crude oil in Russia. Russian oil accounted for 19-20 per cent of Indian Oil’s total crude oil imports in the second quarter of 2025-26 (Q2FY26), compared to 24 per cent in Q1FY26.

 

 

India’s state-run oil refiners are procuring Russian crude oil from the spot market through traders, shielding the companies from direct impact of the US sanctions. Sahney declined to comment on Indian Oil’s future strategy for procurement of Russian oil.

 

Experts say traditionally risk-averse state-owned OMCs have been reducing their purchases of Russian volumes directly from Rosneft and Lukoil. "They are likely to further reduce direct transactions with sanctioned entities to mitigate exposure to secondary sanctions related to shipping, insurance, and financial channels. They will, however, continue indirect purchases through intermediaries where feasible,” said Sumit Ritolia, lead research analyst for refining and modelling at Kpler.

 

Unlike oil PSUs (Public Sector Undertakings), private player Reliance Industries Limited (RIL) has a 25-year term contract with Rosneft for supply of 500,000 barrels per day (bpd) of crude oil. RIL had last week said it would adhere to applicable sanctions and adapt its refinery operations to meet compliance requirements, stating that supply contracts evolve to reflect “changing regulatory conditions”. Another major private player, Nayara Energy, is 49 per cent owned by Rosneft.

 

IOCL’s second quarter results

 

The company reported standalone net profit of ₹7,610 crore for Q2FY26 as compared to a net profit of ₹180 crore posted in Q2FY25. The higher profit is attributed to improved gross refining margins (GRMs) and subdued crude oil prices. IOCL’s average GRM was $10.66 per barrel in Q2FY26 as compared to $1.59 a barrel last year.

 

Indian Oil’s revenue from operations grew 3.58 per cent year-on-year (Y-o-Y) at ₹2.02 trillion in Q2FY26, compared to ₹1.95 trillion in Q2FY25.

 

The company reported under-recovery of ₹25,768 crore on sale of Liquefied Petroleum Gas (LPG) cylinders until September 30. The government would provide compensation of ₹14,486 crore to the company for LPG under-recovery starting November 2025.

 

Indian Oil's refinery throughput improved 5.2 per cent to 17.609 million tonne (mt) in Q2FY26. The company said its petroleum sales grew 4.19 per cent in the second quarter to 22.851 mt, as compared to 21.931 mt last year, while exports improved by 37 per cent in the quarter.