Page 5 - Policy Economic Report - August 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Gold reserves were down by $2.16 billion to stand at $86.16 billion during the week. India’s special
drawing rights (SDRs) with the International Monetary Fund (IMF) rose by $41 million to $18.782 billion.
As per the data, India's reserve position with the IMF was up by $15 million at $4.75 billion in the reporting
week.

India’s total exports (Merchandise and Services combined) for July 2025 is estimated at US$ 68.27 Billion,
registering a growth of 4.52 percent vis-à-vis July 2024. Total imports (Merchandise and Services
combined) for July 2025 is estimated at US$ 79.99 Billion, registering a growth of 6.07 percent vis-à-vis
July 2024. India’s total exports during April-July 2025 is estimated at US$ 277.63 Billion registering a
growth of 5.23 percent. Total imports during April-July 2025 is estimated at US$ 308.91 Billion registering
a growth of 4.25 percent.

Standard & Poor’s (S&P) Global Ratings upgrades India’s long-term sovereign credit rating to ‘BBB’ from
‘BBB-’ and its short-term rating to ‘A-2’ from ‘A-3’, with a Stable Outlook. This marks the country’s first
sovereign upgrade by S&P in 18 years, the previous one being in 2007 when India was elevated to
investment grade at BBB-. In May 2024, the agency revised its outlook on India from ‘Stable’ to
‘Positive’.

As per S&P’s India sovereign rating review, the upgrade reflects a combination of key factors, including
India’s buoyant and dynamic economic growth, the government’s sustained commitment to fiscal
consolidation, improved quality of public spending, particularly on capex and infrastructure, and strong
corporate, financial, and external balance sheets. Credible inflation management and increasing policy
predictability have also played a central role.

As far as oil and gas industry is concerned, oil prices have been caught in the crosshairs of fast-changing
market dynamics. While new sanctions on Russia and Iran threaten to impact trade flows, weaker
economic growth is poised to temper demand. Volatility in oil markets slumped to near all-time lows in
July as Brent crude oil futures hovered around $70/bbl. However, the early August OPEC+ supply
agreement and the prospects for untenable stock builds later in the year saw Brent crude futures slip to
around $67/bbl.

Global oil demand growth for 2025 has been repeatedly downgraded since the start of the year, by a
combined 350 kb/d. Demand is now projected to rise by around 700 kb/d this year and next. The latest
data show lacklustre demand across the major economies and, with consumer confidence still depressed,
a sharp rebound appears remote. Consumption in emerging and developing economies has been weaker
than expected, with China, Brazil, Egypt and India all revised down compared with last month’s Report.
Aviation has been an exception, with robust summer travel propelling jet fuel demand to all-time highs in
both the United States and Europe.

Spot prices showed a mixed trajectory in July, despite robust physical market fundamentals during the
summer holiday season, as uncertainties in the futures market influenced spot price performance. Prices
were supported by strong refining margins in Europe and the US Gulf Coast (USGC), along with a continued
increase in global refinery intakes, reflecting firm demand, particularly for transportation fuels. This
strength was especially evident in gasoil/diesel margins. The medium sour benchmark Dubai averaged

August 2025 Page | 4