Page 5 - Policy Economic Report - November 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

The combined Index of Eight Core Industries (ICI) in October 2025 has remained unchanged at
162.4 (provisional) as compared to the Index in October, 2024. The production of Fertilizer, Steel, Cement
and Petroleum Refinery products recorded growth in October, 2025. The final growth rate of Index of
Eight Core Industries for September 2025 was observed at 3.3 per cent. The cumulative growth rate of ICI
during April to October, 2025-26 is 2.5 per cent as compared to the corresponding period of last year.

On the external front, India’s foreign exchange reserves recorded a strong rise for the week ended 14
November, increasing by USD 5.543 billion to reach USD 692.576 billion, according to the Reserve Bank of
India (RBI). The surge in the country’s reserves this week was driven largely by a steep jump in the value
of gold holdings. Gold reserves rose by USD 5.327 billion. Foreign currency assets (FCAs), the largest
component of India’s reserves, saw a modest rise of USD 152 million.

India’s total exports (Merchandise and Services combined) for October 2025 is estimated at US$ 72.89
Billion, registering a negative growth of 0.68 percent vis-à-vis October 2024. Total imports (Merchandise
and Services combined) for October 2025 are estimated at US$ 94.70 Billion, registering a growth of 14.87
percent vis-à-vis October 2024.

As far as oil and gas industry is concerned, global oil market balances are looking increasingly lopsided, as
world oil supply is forging ahead while oil demand growth remains modest by historical standards. At the
same time, the risks to the forecast remain plentiful, with the economic repercussions of the recent tariff
turmoil and the US federal government shutdown still uncertain, and the impacts of new sanctions on
Russia yet to become clear. North Sea Dated crude oil prices slumped by $3.26/bbl in October, their fourth
consecutive monthly decline, to average $64.64/bbl, and were trading at around $62/bbl.

Russia’s oil industry has come under more severe pressure after the United States and the United Kingdom
sanctioned the two largest Russian producers Rosneft and Lukoil, which together produce and
internationally market about half of the country’s crude. The latest sanctions come into effect on 21
November, but so far Russian exports have continued largely unabated, even as volumes have piled up on
water as buyers evaluate compliance risks and possible workarounds.

Crude spot prices declined in October, partly reversing the gains of the previous month. Prices came under
pressure from heavy selling in the futures market and the easing of supply risk premiums. Global refinery
intakes fell by around 1.7 mb/d in October, marking the third consecutive monthly drop amid planned
and unplanned outages in major refining hubs. This reduced crude demand in the spot market, and
weighed down on prices. The EIA also reported a build in US crude oil stocks during the first half of the
month, adding to the bearish sentiment.

Natural Gas spot prices at the US Henry Hub benchmark averaged $3.19 per million British thermal units
(MMBtu) in October 2025. Henry Hub's natural gas prices advanced for a second consecutive month,
increasing by 7.5%, m-o-m, in October. Weather and an early start to the heating season increased gas
demand in the period, thus lifting prices. Healthy US LNG exports in the period added support to prices,
though storage builds capped price gains. According to data from the US Energy Information
Administration (EIA), average weekly natural gas storage increased by 8.7%, m-o-m, in October. Prices
were up by ~45%, y-o-y.

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