Indian Oil Corporation Ltd (IOCL), the country’s largest oil refiner, has entered into a five-year deal with global commodities trader Trafigura for the supply of liquefied natural gas (LNG), according to trade sources and a company statement.
The deal, which is valued between $1.3 billion and $1.4 billion, will see the LNG priced based on the US Henry Hub benchmark. Supplies are expected to begin in the second half of 2025.
One of the sources shared that 27 cargoes will be delivered over the contract period, with three to four arriving this year and six cargoes per year starting next year.
Arvinder Singh Sahney, Chairman and Managing Director of IOCL, shared that the company expects to receive around 2.5 million tonnes (mt) of LNG through this contract.
According to trade experts, the deal shows an increase in LNG cargoes initially intended for China being redirected to India due to changing demand patterns.
India is currently the fourth-largest LNG importer in the world, having imported 26.58 million metric tonnes in 2024, as per data from Kpler.
The US is already India’s second-largest LNG supplier, and both countries are working on increasing volumes. India is considering removing import taxes on US LNG to boost energy imports and reduce its trade surplus with the US.
Besides Indian Oil, other Indian companies are also exploring long-term energy deals with the US.
GAIL India, another major LNG importer, recently floated a tender seeking a stake in a US-based LNG project. This proposal also includes a plan to enter into a 15-year import agreement.
At the same press conference, the IOCL chairman also discussed the company’s performance and key developments over the last fiscal year. He revealed that Russian crude accounted for 22% of the company’s crude oil imports, down from 30% in the previous financial year (FY24).
He clarified that the drop in Russian oil imports was not related to sanctions, which were imposed only in January 2025. According to him, the reduction was purely a commercial decision.
On the financial side, IOCL reported a significant year-on-year growth of 52.47% in consolidated net profit for the March 2025 quarter, reaching ₹8,367.63 crore.
However, the company’s overall profit for FY25 fell sharply by 68%, standing at ₹13,788.83 crore compared to ₹43,161.15 crore in FY24.
This drop in annual profits was mainly due to lower refining margins and increased expenses. The company’s gross refining margin fell to $4.80 per barrel in FY25, down from $12.05 per barrel the previous year.
Its total income for the fiscal year also declined by 2.5%, amounting to ₹8.62 trillion.
Despite the profit decline, IOCL reported growth in its sales volumes. Domestic sales reached 95.375 million tonnes in FY25, compared to 92.311 million tonnes in FY24.
When exports are included, the company’s total sales volume rose to 100.292 million tonnes from 97.551 million tonnes, showing an overall growth of 3%.
Finance costs also increased during the year, rising to ₹8,732 crore in FY25 from ₹7,328 crore in the previous financial year.
Reference: Reuters
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