Shares of oil marketing companies (OMCs) came under sharp pressure on Thursday, falling up to 6% as crude prices surged amid escalating tensions in the Middle East. Hindustan Petroleum Corporation (HPCL) led the decline, dropping over 6%, followed by Bharat Petroleum Corporation (BPCL), which fell more than 5%, and Indian Oil Corporation (IOC), down over 3%. The selloff tracked a sharp spike in global oil prices, with Brent crude for May delivery jumping as much as 5.5% to nearly $115 per barrel.
Crude prices have rallied aggressively after Iran launched attacks on key energy infrastructure across West Asia, including a major LNG facility in Qatar. The escalation follows earlier strikes on Iran's South Pars gas field and marks a significant widening of the conflict.
Reports indicate that missile strikes caused extensive damage at Ras Laffan, Qatar's primary LNG processing hub. In the UAE, authorities temporarily shut certain operations, including at the Habshan gas facility and the Bab oil field, following damage from intercepted missile debris. The latest developments have heightened fears of a supply disruption, pushing oil prices up more than 50% since the conflict began.
Worst Monthly Fall For OMCs In Over A Decade
OMC stocks have now fallen about 25% month-to-date, marking their steepest decline since June 2008. The sharp correction comes as crude prices have surged nearly 57% over the same period — the biggest monthly jump in at least three decades.
The spike in crude has severely dented marketing margins for OMCs. According to Nomura, blended marketing margins have slipped to below negative Rs 40 per litre, while other estimates suggest losses could be as steep as Rs 60 per litre.
Elara Securities warns that without timely retail price hikes, earnings for OMCs could see a steep decline of 90–180%, highlighting the vulnerability of the sector to sustained high crude prices.
With retail fuel prices yet to fully reflect the surge in crude, the pressure on OMC balance sheets is mounting. Analysts say the trajectory of oil prices and any government-led price adjustments will be critical in determining near-term earnings recovery.
ALSO READ: Brent Crude Jumps To $115 As Middle East Conflict Hits Critical Energy Infrastructure
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.