Shares of India's state-run oil marketing companies (OMCs) Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd, tumbled in early trade on Monday, July 13, amid a surge in global crude oil prices on the ongoing geopolitical tensions between US and Iran. The US military launched strikes against Iran in the Strait of Hormuz, raising fears their fragile truce was unravelling and Middle East supplies could be disrupted again. Tehran has blocked the Strait.
Shares of IOCL, BPCL, and HPCL opened nearly 2% lower each and extended losses trade in red amid a broader bearish sentiment across the domestic frontline indices. On the NSE, shares of HPCL last traded 1.25% lower at Rs 390.35, IOC traded 0.36% lower at Rs 138.46, and BPCL shares were last down 1.29% lower at Rs 305.75 apiece on the NSE. Tthe NSE Nifty 50 fell as much as 0.9% to 24,000.20, while the BSE Sensex declined as much as 712 points, or 0.9%, to 76,857 in morning trade.
Global crude oil price spikes 4%
Crude oil prices surged over 4% on Monday as energy shipments via the Strait of Hormuz remained under threat, with the US and Iran announcing renewed military strikes. Brent crude futures climbed $3.10, or 4.08%, to $79.11, while the US West Texas Intermediate crude rose $2.95, or 4.11%, to $74.36 per barrel. The latest escalation has renewed a risk premium in oil prices after markets had pared earlier gains following an interim peace agreement between Washington and Tehran.
About 20% of the world's oil and liquefied natural gas transited the Persian Gulf before the war began at the end of February. The latest US strikes marked the fourth round of attacks in a week. The fighting stems from disagreements between US and Tehran over how the Strait of Hormuz should operate under an interim peace agreement signed on June 17. Shipping through the strait remained limited on Monday, extending a slowdown that began after tensions intensified last week.
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