Crude price dropped sharply overnight after U.S. President Donald Trump hinted at a ceasefire between Israel and Iran. The result? A 7.2% fall in Brent crude, now at $71.48 per barrel, and WTI crude sliding to $68.51.
And just like that, oil marketing companies (OMCs) like IOC, BPCL, and HPCL saw their shares surge.
OMCs Rebound After Weeks of Pressure
Over the last month, high crude prices had hammered stocks of downstream companies. IOC, BPCL, and HPCL struggled as rising input costs squeezed margins. They couldn’t fully pass on these costs to customers—thanks to pricing regulations and weak demand.
But with crude prices now dropping, that pressure is lifting fast.
At 9:17 AM today, June 24:
- IOC rose 3.6% to ₹144.93
- BPCL jumped 3.3% to ₹323.85
- HPCL surged 4.5% to ₹411.50
It’s a strong bounce for stocks that were under fire just weeks ago.
Oil Explorers Take the Hit
While OMCs celebrated, upstream oil companies like ONGC and Oil India faced the opposite reaction. Lower crude price means lower earnings per barrel. And with their costs largely fixed, the math doesn’t work in their favor.
Today’s numbers say it all:
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ONGC dropped 2% to ₹246.13
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Oil India sank 3.4% to ₹456.10
These stocks had gained nearly 10% over the last month—but that run may be cooling.
Brokerage Views: A Mixed Bag
Brokerages are taking sides too.
- Emkay Global says OMCs still have upside if crude stays below $75/bbl. LPG subsidies and lower international LPG prices could further boost earnings.
- JM Financial remains bullish on ONGC and Oil India. For every $1 increase in crude, their EPS rises 1.5–2%. But today, that’s not the direction things are going.
What It Means for Investors
Crude price is more than just a global commodity—it’s a key trigger for oil stock moves. When it goes down, OMCs benefit. When it goes up, explorers like Oil India win.
Today’s market moves are a classic textbook reaction. The next moves? Watch the geopolitical headlines closely.
Disclaimer:
This article is for informational purposes only and does not constitute investment advice. Please consult a certified financial advisor before making any investment decisions.
Also Read Stock Markets Rally After Trump’s Israel-Iran Ceasefire Announcement
