UBS Warns: West Asia Turmoil Drives Crude Surge, Threatening Indian OMCs' Profits

• UBS warns Indian state-run Oil Marketing Companies (OMCs) face significant profit pressure due to escalating crude oil prices.
• Geopolitical tensions in West Asia are driving crude volatility, creating market conditions similar to the 2022 oil shock.
• OMCs like Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited have limited flexibility to pass on higher crude costs as domestic retail fuel prices remain stable since May 2022.
• Every $5 per barrel increase in crude, if not passed on, could significantly erode OMCs' marketing margins and profits.
• UBS forecasts Brent crude to average $71-$72/barrel in 2026, but prices could exceed $90-$100 if energy infrastructure disruptions persist.