Barring a few macro risks, oil marketing firms seem to be in a sweet spot

China today has the largest refining capacity globally, with its refining capacity to reach 21 million barrels per day (mb/d) in 2025

Global refining dynamics look favourable for Indian refiners and oil marketing companies (OMCs), given the tight inventories, and renewed demand in the European Union.

 

China’s desire to consolidate its refining sector by shutting smaller capacities and upgrading outdated refineries has also led to short-term supply tightness.

 

Meanwhile, crude oil and gas prices are flat and Indian refiners are continuing to source Russian supply at a discount to Brent.

 

Hence, OMCs in the July-September quarter (Q2) of FY26, could pick up high gross refining margins (GRMs), and appear to be comfortably surpassing the benchmark Singapore GRM of $4.1 per