OMC Stocks HPCL, BPCL, IOC And Others Rally On Crude Oil Cool-Off — So Why Are ONGC And Oil India Shares Sliding?

OMC Stocks Today: On Tuesday, shares of oil marketing companies (OMCs) such as Hindustan Petroleum Corporation Ltd (HINDPETRO), Indian Oil Corporation (IOC), and Bharat Petroleum Corporation Ltd (BPCL) surged after crude oil prices fell sharply following the ceasefire announcement between Iran and Israel by US President Donald Trump. 

Meanwhile, upstream oil producers like ONGC and Oil India saw their stock prices decline as global oil prices dropped to a two-week low.

Why OMC Stocks Are Rising

The ceasefire announcement removed the immediate risk of a supply disruption from the oil-rich Middle East, leading to a steep fall in crude oil prices. Brent crude futures dropped 5.3% to $67.66 per barrel, while WTI crude fell 5.5% to $64.76. This price level is expected to stabilise around $65 in the near term, according to a recent SBI report.

OMCs benefit directly from falling crude oil prices. These companies purchase crude oil and refine it into fuels such as petrol, diesel, and jet fuel. Lower crude prices reduce their input costs and improve marketing margins, which translates into better profitability. 

Moreover, stable and lower fuel prices help manage inflation in India and may even reduce the government’s burden on fuel subsidies.

Among oil marketing companies, Hindustan Petroleum rose 2.82%, Indian Oil gained 2.36%, and BPCL was up 1.87%. Petronet LNG climbed 1.28%, Adani Total Gas added 1.12%, and IGL rose 0.82%. 

GAIL also inched up 0.73%, while Reliance Industries saw a modest gain of 0.16%. 

Also Read: BSE Sensex Jumps 1000 Points, Nifty 50 Surges On Ceasefire

But Why ONGC, Oil India Is Down?

On the other hand, upstream oil producers such as ONGC and Oil India fell, with ONGC down 2.51% and Oil India slipping 4.86%. These companies earn revenue by selling crude oil, so falling prices hurt their earnings potential and weighed on their share prices.

The ceasefire significantly reduces the geopolitical premium that was recently priced into oil. A prolonged conflict, or escalation involving Iran—a key OPEC member—could have disrupted supply from the region and driven prices toward $130-140 per barrel in a worst-case scenario.

Instead, a de-escalation allows Iran to continue exporting oil, easing concerns about shortages and putting downward pressure on prices.

Furthermore, the Strait of Hormuz—through which nearly one-fifth of global oil passes—was no longer under immediate threat. This has eased global supply concerns and stabilised markets, reducing the scope for any further upside in oil prices that would have benefited upstream companies.