HPCL, BPCL, IOCL: Oil marketing companies' shares decline as oil prices top $100/bbl once again

Oil prices surged more than 8% on Thursday, with Brent crude touching the $100-per-barrel mark, as traders remained sceptical that the release of government stockpiles would be enough to offset the massive supply shock caused by the ongoing conflict in the Middle East.

Meanwhile, West Texas Intermediate jumped 8.8% to around $95 per barrel, while Brent was trading about 8.9% higher near $100, even after the International Energy Agency announced the largest emergency release of crude reserves in its history.

The IEA said on Wednesday that its 32 member nations would release 400 million barrels of oil from emergency reserves, marking the biggest coordinated drawdown since the agency was formed following the 1973 oil embargo.

Stocks' performance

At the time of writing, IOCL shares were down 3% at ₹155.90, BPCL was down nearly 2% at ₹318.95, and HPCL declined by 2.6% to ₹374.25 on the NSE. Despite the emergency crude release, varied stock movements reflect broader market concerns over prolonged high oil prices.

What CLSA said on oil & gas sector amid West Asia crisis

Analysts at CLSA have cautioned that India’s energy supply chain could face disruptions due to the ongoing conflict involving Iran, with LPG supplies seen as the most vulnerable, followed by LNG.

The leading financial services firm noted that alternative supply support may only materialise by the end of April, raising the possibility of an acute LPG and gas shortage over the next three to four weeks.

Such a disruption could impact output in sectors such as fertilisers, petrochemicals, restaurants, glass, and ceramics that rely heavily on gas as a key input.

While petrol and diesel supplies face relatively lower risk as India is a net exporter of refined fuels, oil marketing companies such as Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited may come under margin pressure.

Gas utilities including GAIL, Indraprastha Gas Limited, Mahanagar Gas Limited, Gujarat Gas Limited, and Petronet LNG Limited could also face pressure amid potential supply constraints.