Shares of upstream oil majors Oil and Natural Gas Corporation (ONGC) and Oil India surged on Wednesday, scaling over one-year highs, as a sharp rebound in global crude oil prices lifted sentiment across the energy sector.
Oil India shares jumped 9.69% to Rs 492, marking their highest level since January 8, 2025, while ONGC climbed 7.36% to Rs 266.20, the highest since January 22, 2025. The rally also extended to other oil and marketing companies, with MRPL, HPCL, Chennai Petroleum Corporation and BPCL trading firmly in the green.
Crude Oil at Four-Month High Boosts Upstream Stocks
The primary driver behind the rally was a sharp rise in crude oil prices, which touched a four-month high in global markets. Brent crude is now trading close to the $68 per barrel mark, supported by a weaker US dollar and rising geopolitical tensions in the Middle East.
Market participants remain on edge amid speculation around a potential US military strike on Iran. The geopolitical uncertainty comes at a time when expectations of easing tensions in regions such as Ukraine and the Middle East — which had earlier pushed oil prices to multi-year lows in December — have failed to fully materialise. The continued impasse in both regions has revived risk premiums in crude prices.
According to Axis Securities, oil prices climbed to a four-month high near the $62 mark in the previous session, driven by heightened geopolitical risk as the US military buildup in the Middle East kept fears of possible action against Iran in focus. Temporary production disruptions in the US due to winter storm Fern also provided additional support to prices.
Why Higher Oil Prices Matter for ONGC, Oil India
The rise in crude prices is particularly beneficial for upstream oil companies such as ONGC and Oil India, whose earnings are directly linked to global oil price movements. Analysts note that every one-dollar increase in crude prices can significantly boost annual revenues for both companies, improving cash flows and profitability.
With crude rebounding sharply from recent lows, investor confidence in upstream oil producers has strengthened, leading to renewed buying interest in these stocks.
ONGC’s Strategic JV Adds to Positive Sentiment
Adding to the positive momentum, ONGC recently announced progress on a key strategic initiative. Its joint venture with Japan’s Mitsui O.S.K. Lines (MOL) has finalised shipbuilding contracts with South Korea’s Samsung Heavy Industries. The development is seen as a step forward in strengthening ONGC’s offshore logistics and energy transportation capabilities.
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