INDUSTRY OUTLOOK

Demand & Processing Trends

Strong growth trajectory: India’s oil demand is projected to grow at ~3.2% in 2025, outpacing China, driven by expanding economic activity and rising transportation needs.

High refinery utilization: Refiners ran at over 103% capacity in recent months, processing around 5.3 million barrels per day (bpd) in late 2024.

Seasonal dip in June 2025: Crude throughput fell ~4% to 5.41 mb/d, partly due to monsoon related demand softness, though Russian oil import dependence rose (~17.4%).

Capacity Expansion Landscape

Ambitious expansion plans: India aims to raise refining capacity from ~249 mtpa (~5 mb/d) to ~450 mtpa (≈9 mb/d), representing ~81% growth, with targets of exceeding 310 mtpa by 2028.

S&P Global Outlook:Capacity expected to reach ~300 mtpa by 2028, ~58% via brownfield expansions, remainder greenfield projects (~18 mtpa).

Strategic Shifts & Sustainability

Pivot to petrochemicals: Refiners including IOC, BPCL, HPCL, Reliance, and Nayara are investing in petrochemical capability to raise petrochemical intensity from ~5% to 10–15% or higher—projects underway with integration in new refining complexes.

Sustainability focus: Green hydrogen plants, energy efficiency improvements, biomass blending, and potential carbon capture investments are being pursued to reduce carbon footprint and align with national goals.

IEA outlook: India to add ~1 million bpd of distillation capacity over seven years—surpassing all countries except China—and project exports of ~1.4 mb/d of middle distillates by mid decade, dipping to ~1.2 mb/d by 2030 as domestic consumption rises.

Geopolitical & Market Dynamics

Global export positioning: India is increasingly a go-to supplier of middle distillates and light fuels for Asia and Europe, especially as European demand shifts away from Russia, though export volumes may moderate post 2030.

Import diversification: OPEC exports to India are set to recover after a dip in Russian crude imports; India imported ~4.6 mb/d of crude in 2023 with projections of 5.8 mb/d by 2030, raising energy security considerations.

Sanction ripple effects: New EU sanctions on Russian-origin refined products are reshaping supply chains—traders may be intermediaries for rerouting exports, raising costs and compliance risk

Outlook Summary

India's refining sector remains on a fast-growth trajectory, matching its rising consumption and export ambitions. Despite delays, capacity expansion is underway, especially through brownfield upgrades. The industry is strategically transforming—leaning into petrochemicals, investing in cleaner energy links like hydrogen and biofuels, and adapting to global regulatory pressures. While geopolitical turbulence (e.g., sanctions on Russian-linked exports) and investment bottlenecks pose risks, India's refining sector is positioning itself as a regional hub for resilient, diversified, and sustainable oil products supply

Latest Shareholding Pattern of Nayara Energy Ltd.