US-Iran war: Oil stocks such as ONGC and Oil India gained up to 2%, while shares of oil marketing companies (OMCs), including HPCL, BPCL, and IOC, declined more than 2% during Monday’s trading session. The movement came as crude oil prices surged amid escalating geopolitical tensions between the US and Iran.
ONGC share price surged over 1.63% to ₹236.90 apiece on Monday; meanwhile, Oil India share price gained nearly 1.16% to ₹411.50.
On the other hand, IOC turned the biggest laggard among the OMC stocks, declining over 2%. Other OMC stocks, HPCL and BPCL shares, also witnessed similar downward movement of 1.60% and 1.81% on 29 June.
Why are oil stocks rising and OMC stocks falling?
The movement in the stocks came after crude oil prices on the international front rose more than 1% following a fresh round of retaliatory strikes between the US and Iran highlighted the fragile nature of their interim peace agreement and disrupted energy shipments through the Strait of Hormuz once again.
Brent crude futures gained 58 cents, or 0.8%, to trade at $72.57 per barrel, while US West Texas Intermediate (WTI) crude rose 88 cents, or 1.3%, to $70.11 per barrel.
The gains followed a sharp 10.6% decline in Brent prices last week—the benchmark’s third consecutive weekly loss—as crude shipments through the Strait of Hormuz climbed to their highest levels since the U.S.-Israeli conflict with Iran began in late February.
Shipping activity, however, slowed again after renewed attacks on vessels in the strait from Thursday onwards, including a Qatar-linked oil tanker. The incidents prompted retaliatory strikes by both the U.S. and Iran, marking the most significant escalation since the two sides agreed to an interim peace deal.
Limiting further upside in oil prices, US and Iranian officials agreed on Sunday to suspend recent hostilities in the Gulf and resume negotiations over their dispute involving the Strait of Hormuz, US officials were quoted as saying by Bloomberg.
Meanwhile, Saudi oil major Aramco restarted crude loading operations at its Ras Tanura terminal, located west of the Strait of Hormuz, on Friday after a nearly four-month suspension. The move comes as oil producers increase output and exports ahead of the interim agreement.
Operations at the terminal continued despite a helicopter crash involving an Aramco aircraft on Sunday at Ras Tanura that claimed the lives of 14 nationals. The cause of the accident remains under investigation.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
