Hindustan Petroleum Corporation (HPCL) shares dropped over 4% to trade at Rs 367.5 apiece, the lowest level seen by the stock since April last year. Bharat Petroleum Corporation (BPCL) shares declined more than 3%, while Indian Oil Corporation (IOC) shares tumbled over 4%.
The raging war between Iran and Israel-US has further escalated, with Iran launching multiple attacks on several countries in the Middle East. Earlier, Iran set ablaze two tankers in Iraqi waters. Iran also targeted fuel tanks at a facility in Bahrain’s Muharraq, the interior ministry said. Iraqi security officials said Iranian explosive-laden boats had hit two fuel oil tankers amid other global supply disruptions from the U.S.-Israeli war on Iran. Additionally, multiple drones struck fuel storage tanks at the Port of Salalah in Oman, with fire erupting in at least two fuel tanks.
As a result of the rising hostilities and attacks on oil tankers, oil prices surged back above $100 per barrel mark. The crude oil prices crossed the key psychological mark of $100 on Monday for the first time since Russia’s invasion of Ukraine back in 2022. Oil prices cooled down later, falling below the $90 mark on hopes of a sooner end to the raging war that began earlier this month when US and Israel conducted missile attacks on Israel, killing its supreme leader Ayatollah Khamenei, followed by massive retaliation from Tehran.
Iran warns oil prices to hit $200 per barrel
After Iran’s latest attacks on oil tankers, the country warned that the world should be ready for oil prices to hit $200 a barrel. “Get ready for oil to be $200 a barrel, because the oil price depends on regional security, which you have destabilised,” said a spokesperson for Iran’s military command.
The latest escalations further dampened hopes for a sooner end to the raging war in the Middle East, and subsequent resumption of traffic through the Strait of Hormuz, which remains a critical choke point for oil imports and exports.
As a result, oil prices surged despite International Energy Agency (IEA) agreeing to release 400 million barrels of oil from its members’ strategic reserves, its largest ever stock release to ease the supply constraints.
Brent crude futures surged around 9% to $100.2 per barrel, while WTI Crude gained over 8% to $94.45 per barrel, as seen at 10 am IST.
OMCs to face margin pressure, cash-flow volatility: Moody’s Ratings
India’s state-owned oil marketing companies (OMCs) could face heightened margin pressure and cash-flow volatility as global energy prices rise while domestic fuel prices remain largely unchanged, according to a report by Moody’s Ratings.
The agency said that the country’s three largest fuel retailers – IOC, BPCL and HPCL – will likely continue absorbing higher input costs stemming from elevated global crude and gas prices.
When international oil prices rise, procurement and refining costs increase sharply while retail prices for petrol and diesel remain unchanged, compressing marketing margins and weakening operating cash flows.
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