Shares of oil marketing companies (OMCs) such as Hindustan Petroleum Corporation Ltd (HPCL), Bharat Petroleum Corporation Ltd (BPCL) and Indian Oil Corporation (IOC) declined up to 4% on Thursday amid a sharp rise in global crude oil prices. The Nifty Oil & Gas index also fell nearly 0.5%.
HPCL share price dropped as much as 4.06% to ₹437.00 apiece, while BPCL shares fell 2.66% to ₹330.00 apiece and Indian Oil stock price declined 2.58% to ₹150.05 apiece on the BSE. Mangalore Refinery and Petrochemicals (MRPL) shares also tumbled 4.02% to ₹144.40 apiece.
The sell-off in oil stocks came after crude oil prices surged, with the Brent oil prices gaining more than 3%. Higher crude oil prices weigh on the margins of oil marketing companies.
Crude oil prices rise amid sanctions and supply concerns
Crude oil extended its gains from the previous session after reports suggested that Indian refiners were reviewing their purchases of Russian oil. This comes in the wake of the US imposing sanctions on Russia’s major oil producers Rosneft and Lukoil over the Ukraine war.
Brent crude oil prices rallied 3.53% to $64.80 per barrel, while US West Texas Intermediate crude futures gained 3.57% to $60.59.
The move follows US President Donald Trump’s decision to impose Ukraine-related sanctions on Rosneft and Lukoil as part of a broader effort to isolate Russian energy exports. The UK had imposed similar sanctions a week earlier, while EU nations approved their 19th sanctions package, which includes a ban on Russian LNG imports.
Impact on India’s Russian oil imports
President Trump also stated that India will reduce its Russian oil imports by nearly 40% by the end of the year, phasing them out “to almost nothing.” According to a Reuters report, Indian refiners are now preparing to significantly cut Russian crude purchases in response to the new sanctions.
Reliance Industries, India’s largest buyer of Russian crude, is reportedly planning to reduce or completely halt such imports. A company spokesperson told Reuters that “Recalibration of Russian oil imports is ongoing, and Reliance will be fully aligned with Government of India guidelines.”
State-run refiners such as HPCL, BPCL, and IOC typically do not buy Russian oil directly from Rosneft or Lukoil, instead sourcing it through intermediaries. However, market analysts noted that skepticism persists over whether US sanctions will lead to a major supply disruption, which has capped further gains in crude prices so far.
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