Shares of oil marketing companies (OMCs) such as Hindustan Petroleum Corporation Ltd (HPCL), Bharat Petroleum Corporation Ltd (BPCL) and Indian Oil Corporation (IOC) fell as much as 4% on Thursday amid a sharp rise in global crude oil prices. The Nifty Oil & Gas index also fell by nearly 0.5%. HPCL share price fell as much as 4.06% to ₹437.00 apiece, while BPCL shares fell 2.66% to ₹330.00 apiece and Indian Oil share price fell 2.58% to ₹150.05 apiece on the BSE. Mangalore Refinery and Petrochemicals (MRPL) shares also tumbled 4.02% to ₹144.40 apiece. The sell-off in oil stocks came after crude oil prices rose, with Brent oil prices rising more than 3%. Higher crude oil prices are weighing on the margins of oil marketing companies. Crude oil prices rise amid sanctions and supply concerns Crude oil extended its gains from the previous session after reports suggested Indian refiners were reviewing their purchases of Russian oil. It comes in the wake of the US imposing sanctions on Russia’s major oil producers Rosneft and Lukoil over the Ukraine war. Brent crude oil prices rose 3.53% to $64.80 a barrel, while U.S. West Texas Intermediate crude futures rose 3.57% to $60.59. The move follows US President Donald Trump’s decision to impose Ukraine-related sanctions on Rosneft and Lukoil as part of a broader effort to isolate Russian energy exports. The UK imposed similar sanctions a week earlier, while EU countries approved their 19th sanctions package, which includes a ban on Russian LPG imports. Impact on India’s Russian oil imports President Trump has also stated that India will reduce its Russian oil imports by almost 40% by the end of the year and phase them out “to almost nothing”. According to a Reuters report, Indian refiners are now preparing to significantly reduce Russian crude purchases in response to the new sanctions. Reliance Industries, India’s largest buyer of Russian crude, is reportedly planning to reduce or stop such imports altogether. A company spokesperson told Reuters that “Recalibration of Russian oil imports is underway, and Reliance will be fully compliant with the guidelines of the Government of India.” State-owned refiners such as HPCL, BPCL and IOC usually do not buy Russian oil directly from Rosneft or Lukoil, but instead get it through intermediaries. However, market analysts noted that skepticism remains over whether US sanctions will lead to a major supply disruption, which has so far limited further gains in crude oil prices. Disclaimer: The views and recommendations made above are those of individual analysts or brokerage firms, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
HPCL, BPCL to IOC: Why are oil stocks under pressure?
