ONGC and Oil India Shares Surge as Rising US-Iran Tensions Lift Oil Prices
Shares of Indian oil producers ONGC and Oil India climbed as much as 7% on February 19. This jump came as global crude oil prices rose due to increasing geopolitical tensions between the U.S. and Iran.
While oil producers saw gains, oil marketing companies (OMCs) faced a different story. Shares of HPCL, BPCL, and IOC dropped during the same trading session.
Stock Performance at a Glance
| Company | Stock Price Change | Trading Price (Apiece) |
| Oil India | Up 7%+ | ₹485.80 |
| ONGC | Up 4.5% | ₹276.45 |
| HPCL | Down 4%+ | ₹437.20 |
| BPCL | Down 3%+ | — |
| IOC | Down 2%+ | — |
Why Are Oil Prices Rising?
The primary driver for the price hike is the growing concern over a potential conflict between the U.S. and Iran. Analysts at ING, as reported by Reuters, noted that investors are worried about how U.S. actions might affect global oil supplies.
A major concern is the Strait of Hormuz, a critical narrow waterway. If shipping through this area is disrupted, it could significantly impact oil flows from the Persian Gulf. Recent satellite images also suggest that Iran is reinforcing its nuclear facilities by building hardened underground bunkers, signaling a move to protect its assets as U.S. military presence in the region grows.
Global Oil Benchmarks
As of 3:15 PM IST on Thursday:
- Brent Crude: Rose 71 cents (1.01%) to $71.06 per barrel.
- WTI Crude: Rose 69 cents (1.06%) to $65.88 per barrel.
Upstream vs. Downstream: Why the Split?
In the oil industry, not all companies react to high prices in the same way.
- Upstream Companies (ONGC, Oil India): These companies explore and produce raw crude oil. When global prices rise, they earn more for every barrel they sell, leading to higher stock prices.
- Downstream Companies (HPCL, BPCL, IOC): These are marketing and refining companies. They buy crude oil to turn it into fuel. When crude prices go up, their costs increase. If they cannot raise fuel prices at the pump immediately, their profit margins get squeezed, causing their stock prices to fall.
Also Read : G Kishan Reddy Announces Timeline for India’s Permanent Magnet Production
