OMC Marketing Outlook Improves with Peace in the ME

Research evidence excerpt

OMC Marketing Outlook Improves with Peace in the ME

India | Energy EquityJuneResearch15, 2026

Exhibit 1 - OMCs stock performance sinceOMC Marketing Outlook Improves with Peace

start of ME conflict (%)

OMCs stock performance since start of ME conflict (%)in the ME

0%

Peace in the Middle East should gradually normalize energy prices. -5%

Marketing losses on petrol and diesel at Spot Brent have narrowed to Rs (-) -10%-15% -8%

2/lt and Rs (-) 11/lt. Assuming normative GRMs, marketing margins at Spot -20% -19%

-23%Brent will rise above normative levels. This may lead to some increase in -25% HPCL BPCL

excise duties that were lowered in March. BPCL/IOCL are down 19%/23% .Source: Bloomberg, Jefferies IOCL

since the start of the conflict and offer compelling risk-reward in our view. Exhibit 2 - BPCL's valuation attractive related

to HPCL

Refining margins elevated: Singapore GRM prevails at US$ 18/bbl - up 4x vs Feb end. 3.0 BPCL's valuation attractive related to HPCL

Gasoline/diesel/aviation fuel cracks are US$ 32/41/44 per bbl currently. We have noted 2.3

~3.4mbpd of refining capacity damaged since the start of Middle East conflict, i.e., 3.5% of 1.5

global refining capacity. Normalization of supply chains is likely to take time, likely supporting 0.8

elevated margins over 1HFY27. -

Jan-19 Aug-19 Mar-20 Nov-20 Jun-21 Feb-22 Sep-22 May-23 Dec-23 Jul-24 Mar-25 Oct-25 Jun-26

Marketing losses narrow on Spot basis: While Brent has corrected sharply to US$ 83/bbl, BPCL 1-yr fwd PB HPCL 1-yr fwd PB

gasoline/diesel cracks prevail at elevated levels amid higher freight costs (~2x vs Feb end). .Source: Bloomberg, Jefferies

Petrol/diesel marketing losses have narrowed sharply over the past month to Rs (-) 2/ (-) 11

per liter respectively. Exhibit 3 - Marketing margin trend (on 15-D

avg)