India’s state-owned Oil and Natural Gas Corporation Limited (ONGC), the country’s largest oil and gas producer, is moving forward with plans to establish a trading unit for crude oil and refined petroleum products. This initiative aims to benefit its subsidiaries and affiliates, according to statements made by Rajarshi Gupta, managing director at ONGC Videsh, during an energy industry event in New Delhi.
The development of this trading unit is still in its preliminary stages. Gupta noted that an internal group has been formed to explore the operational and legal aspects of the initiative. “We control about 100 million tonnes of oil within the group,” he stated, highlighting the substantial resources ONGC has at its disposal.
As the overseas arm of ONGC, ONGC Videsh is engaged in various activities including exploration, development, and production of oil and gas outside India. The unit is recognized as the second largest petroleum company in India, following its parent company, ONGC.
In terms of production, ONGC generates approximately 42 million tons of crude oil annually. The corporation’s refining subsidiaries, Hindustan Petroleum Corporation Limited (HPCL) and Mangalore Refinery and Petrochemicals Limited (MRPL), collectively import about 45-50 million tons of crude oil each year.
The latest financial results reveal challenges for ONGC. The company reported a net profit of $917 million (approximately 80.24 billion Indian rupees) for the first quarter of the 2025/2026 fiscal year, marking a 10% decrease compared to the same period in the previous financial year. This decline is attributed to falling oil prices and relatively stable production levels.
Between April and June, oil prices dropped by approximately 10%, influenced by high volatility linked to U.S. tariff policies and ongoing geopolitical tensions, particularly the Israel-Iran conflict. ONGC’s crude realizations fell from $80.64 per barrel to $67.87 per barrel during this period.
To counteract these challenges, ONGC has initiated a campaign to enhance oil and gas production. This includes optimizing existing wells and accelerating production from recent discoveries. The company accounts for around 70% of India’s crude oil output and 84% of its natural gas production, underscoring its critical role in the country’s energy landscape.
As ONGC progresses with its plans for the new trading unit, the impact on the broader oil market and the corporation’s financial health will be closely monitored by industry analysts and stakeholders.
