Stocks of (OMCs) such as Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL), and Indian Oil Corporation Limited (IOC) declined by up to 2% in Tuesday’s trading session, tracking a sharp rise in global crude oil prices.
BPCL shares fell 2.11% to ₹306.20 apiece, while HPCL and IOC slipped around 0.77% and 0.64%, respectively. Over the past week, OMC stocks have lost roughly 2–3% each as crude prices have remained elevated above the $100-per-barrel mark.
Brent crude futures for June delivery rose by 45 cents (0.4%) to $108.68 per barrel, extending its winning run to the seventh session.
On the other hand, Oil and Natural Gas Corporation (ONGC) share price hit a 52-week high, surging as much as 4% to ₹297.40 on NSE. Oil India share price also mirrored gains by rising over 3% during the intraday session.
Why are OMC stocks falling?
The ongoing US-Iran conflict and disruptions in the Strait of Hormuz have pushed Brent crude oil prices above $100 per barrel.
Given that India imports nearly 85% of its oil needs, the resulting rise is likely to squeeze margins for oil PSUs, while the weakening rupee could further aggravate the pressure on these companies.
An increase in typically weighs on OMCs, since crude forms the majority of their input costs. As prices rise, the cost of refining and producing fuel also goes up. If retail prices of petrol and diesel are not adjusted in line with the surge in crude, OMCs can see their marketing margins come under strain, potentially impacting their profitability.
Since the government has kept retail prices of fuel unchanged, Abhinav Tiwari of Bonanza said that OMCs remain vulnerable in the near term due to pricing controls.
Devarsh Vakil, Head of Prime Research at HDFC Securities, expects a weak outlook for OMCs as rising crude oil prices are likely to compress their marketing margins. He added that every 50 paise per litre change in fuel margins could lead to a 7–10% impact on EBITDA.
Why are ONGC shares rising?
On the flip side, upstream companies like and Oil India tend to benefit as their realisations improve with rising oil prices.
Seema Srivastava, Senior Research Analyst at SMC Global Securities, said that ONGC has stood out as a relative outperformer in India’s oil and gas space amid the US–Iran conflict and heightened global energy volatility, backed by robust Q3FY26 earnings.
“The current geopolitical environment favours ONGC’s upstream business model, allowing it to benefit from higher realisations. In contrast, downstream PSUs like Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited continue to grapple with margin pressures due to regulated pricing and subsidy burdens. This positions ONGC as a ‘lone outperformer’ in an otherwise subdued PSU landscape,” she added.
Meanwhile, Dhaval Popat, Analyst — Energy at Choice International, said that amid rising oil prices, the opportunity lies less in retail fuel and more in refining margins. “The disruption is tightening global supplies of diesel and jet fuel, supporting stronger product cracks. This creates a favourable setup for complex pure-play refiners in India, with elevated realisations more than offsetting the impact of government-led discounts for OMCs,” he noted.
If the crisis extends into the summer season, stronger jet fuel demand and broader distillate tightness in Europe could lift cracks globally, including in Asia, driving robust year-on-year EBITDA growth for pure-play refiners, according to him. He remains bullish on pure-play refiners.
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