IOC, BPCL, HPCL Share Price Surge Up to 5% as Crude Oil Slumps on Middle East Ceasefire

Market Performance

On Tuesday, June 24, shares of key oil marketing companies—IOC, BPCL, and HPCL—rallied sharply on the NSE, gaining between 3.3% and 4.5% in early trade.

• IOC share price jumped 3.6% to Rs 144.93
• BPCL share price rose 3.3% to Rs 323.85
• HPCL share price climbed 4.5% to Rs 411.50

The rally in the share prices of IOC, BPCL, and HPCL occurred amid a sharp decline in international crude oil prices, driven by easing geopolitical tensions.

In contrast, upstream companies such as Oil India and ONGC saw a drop in their stock value:

• Oil India declined 3.4% to Rs 456.10
• ONGC fell 2% to Rs 246.13

Main News

The latest surge in the share prices of IOC, BPCL, and HPCL is attributed to a sharp decline in global crude oil benchmarks. The announcement of a probable ceasefire between Israel and Iran by U.S. President Donald Trump helped ease fears of prolonged conflict in the Middle East.

This development led to a notable slump in crude oil prices:

• Brent crude fell $5.53 or 7.2%, settling at $71.48/barrel
• WTI crude dropped $5.53 or 7.2%, closing at $68.51/barrel

The cooling tensions brought immediate relief to downstream oil marketing companies (OMCs), which had recently been under pressure due to higher crude input costs.

Company Details

Over the last month, shares of IOC, BPCL, and HPCL were weighed down due to escalating crude prices. These companies, primarily involved in refining and distributing petroleum products, face margin pressure when crude prices surge, as they may not be able to pass on increased costs to consumers.

The sudden decline in oil prices reversed this trend, providing a fresh boost to their stock performance.

On the other hand, upstream firms such as Oil India and ONGC, which benefit from high crude prices due to their fixed cost structures and higher revenue per barrel, saw profit booking amid falling crude benchmarks.

Summary of the Article

• On June 24, shares of IOC, BPCL, and HPCL jumped up to 4.5%, propelled by a significant fall in international crude oil prices.
• The price movement was driven by a reduction in geopolitical risk in the Middle East, resulting in a sharp decline of 7.2% in Brent and WTI crude prices.
• Downstream oil companies, such as IOC, BPCL, and HPCL, gained traction, while upstream oil explorers, including Oil India and ONGC, saw a dip in their share prices.
• Over the past month, OMCs faced selling pressure, but the recent turnaround in crude prices has positively impacted their market sentiment.