US-Iran peace deal: What's next for oil & gas stocks after the Strait of Hormuz reopens?

With the US-Iran peace agreement opening up the key maritime trading route, the Strait of Hormuz, focus now remains on the positive or negative impact of the lower crude oil prices, and the upcoming rise in competition, while suppliers look forward to an end to the supply chain disruption in West Asia.

The sectoral benchmark index Nifty Oil & Gas has gained for the last two consecutive sessions on the Indian stock market, trading over 1% during Tuesday’s session at around 11,300 points, compared to 11,180.60 points at the previous market close.

Market investors are now focusing on the lower input cost tailwind, which will improve the margins and volumes of oil & gas downstream companies on the backdrop of lower input costs, while being aware of the low realisation impact for the oil and gas upstream companies.

What’s next for Oil & Gas stocks?

Experts from Japan-based leading investment firm Nomura said that Oil marketing companies (OMCs), gas distributors, and pressurised liquefied natural gas (PLNG) distributors are expected to benefit the most from the upcoming potential opening of the key trading route, Strait of Hormuz, solving the supply chain disruption.

However, the upstream companies which are involved in the production of the energy sources are likely to face the “maximum negative impact” due to the overall low realisation of both oil and gas.

A low realisation of oil and gas means that the net amount which a company earns from selling the commodity reduces due to the fall in prices or taxation changes, amid the fixed costs.

Gas companies like GAIL are expected to witness a moderately positive impact as the rising volumes of transmission can potentially offset the reducing margins amid the fall in import prices.

“Upside from increased transmission volume will likely be partly offset due to lower marketing margins & reduced margins on LPG production as the import parity price of LPG could come down,” said the Nomura analysts in a note.

While upstream companies are set to witness a potential negative impact as they are sellers of oil and gas, the oil downstream companies will benefit from the lower crude oil prices in the market as they are buyers in the market.

However, concerns remain over the companies, like Reliance, among others, which can potentially witness a negative impact due to the lower refining margins as the supply chain normalises ahead, with the West Asian refiners coming back in action.

“Peace in the Middle East should gradually normalise energy prices. Marketing losses on petrol and diesel at Spot Brent have narrowed to ₹-2 per litre and ₹-11 per litre. Assuming normative GRMs, marketing margins at Spot Brent will rise above normative levels,” said analysts from Jefferies.

Investors will keep a close eye on the export-oriented refining companies, which are likely to face tough competition in the market with the easing geopolitical dynamics and the opening up of the key oil trading route.

Crude oil drops to 3-month low

Global crude oil benchmark, Brent crude oil prices, dropped to a three-month low of $81.71 per barrel, lowest level since March 3, 2026, during the trading session on Tuesday, June 16, after the market sentiment turned positive on the US-Iran peace deal update.

The geopolitical dynamics have cooled down the oil prices to their current levels; however, in case there are any rollbacks from either side ahead of Friday, the prices can rise again in the market.

Although the global crude oil prices have declined after Trump’s US-Iran peace deal announcement, the fuel prices in India for the retail customer will take a while before they may witness a drop, as the companies have already purchased a high-cost inventory at earlier higher price levels.

Oil & gas stocks in focus

*Year-to-date (YTD) returns, 1-year returns, and share price based on NSE data.