Amid the US-Israel-Iran conflict, Dated spot Brent averaged at USD104/bbl in Mar-26 and was USD124/bbl in April MTD (~USD110/bbl currently). Russian crude imports, as per media reports citing Kpler and Centre for Research on Energy and Clean Air, stood at ~2mbpd in Mar-26, valued at €5.3bn, which implies USD100/bbl price. Total crude imports in Mar-26 were 4.5mbpd (-12% MoM) at an average price of USD85/bbl, which includes the previous month’s cargo when Brent was at USD71/bbl. The actual Indian imported crude price should continue to be near spot Brent, as May-26 OSP for Arab Light is also at a USD19.5/bbl premium to regional benchmarks that are currently at USD90- 95/bbl. We, for now, raise our Brent forecast for FY27 to USD86/bbl from USD70/bbl assumed before the conflict, with USD100-105/bbl expected in Q1 and building USD80/bbl thereafter. We assume a hit from the conflict for the whole quarter, though the situation remains highly fluid and oil prices can react either side significantly. The imposition of diesel and ATF windfall taxes imply ~USD20/bbl net cracks targeted by the GoI for refiners based on AG average for 1-10 April. From 11 April onward, net cracks have been negative USD20- 30/bbl, as AG prices cooled down, though we believe the next windfall revision should take care of this. Our Q1FY27 assumptions imply a Rs370-380bn hit for the three PSU OMCs, while USD80/bbl crude from Q2 would normalize earnings even after building absorbed LPG under-recoveries for the full year. The Q1 hit, however, leads to a ~40% cut in FY27E EBITDA for IOCL and BPCL and ~60% for HPCL. We also cut FY28E EBITDA by 14-18% each, narrowing our margin assumption. We value IOCL/HPCL at 6x EV/EBITDA and BPCL at 5.7x (due to upcoming capex cycle). We downgrade IOCL/BPCL/HPCL to ADD from Buy, with a 20-25% cut in Mar-27E TP to Rs160/Rs350/Rs410, respectively.

Brent prices remain volatile as Middle East (ME) situation remains fluid Dated spot Brent crude prices in Apr-26 saw wild swings, from a high of USD145/bbl in the early part to a low of USD99/bbl last weekend, due to ceasefire extension and peace talks. Currently, it is again up at USD112/bbl (Jun-26 futures at USD103/bbl), with no clarity on the ME situation and physical markets remaining tight with inventories depleting and supply chain emptying. We assume USD120/100/90 per barrel Brent for Apr/May/Jun-26 and USD80/bbl thereafter, based on which our revised estimate for FY27/FY28 is USD86/80 per barrel. We assume USD600/mt of international LPG price.