Why Oil Stocks Crashed On May 18 After This US-Iran War Update

The shares of Indian oil marketing companies (OMCs) such as IOCL and HPCL were trading in red on Monday, May 11, amid crude oil prices surpassing the $110 mark, and Trump's "clock ticking warning" to Iran.

As of 11:44 AM, the Nifty Oil & Gas index witnessed 12 stocks in decline, and 3 advancing.

In today's trading session, Indian Oil Corporation Ltd (IOCL) shares declined as much as 3% to hit an intraday low of Rs 130.53 per share, while Bharat Petroleum Corporation Ltd (BPCL) shares fell 2.75% to Rs 276.60 apiece.

Meanwhile, the shares of other oil and gas stocks such as Chennai Petroleum Corporation Limited (CPCL), Oil India, ONGC were also trading in negative.

Adani Total Gas, Mahanagar Gas and GAIL (India) shares fell over 2% each.

This comes after the spike in crude oil prices efforts to end the US-Israeli war on Iran appeared to have stalled, after a nuclear power plant in the United Arab Emirates (UAE) came under attack.

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Recently, the US President Donald Trump on Truth Social penned, "For Iran, the Clock is ticking, and they better get moving, FAST, or there won't be anything left of them. TIME IS OF THE ESSENCE".

Brent crude futures rallied 1.91% to $111.35 a barrel, after touching $112 earlier, the highest since May 5. US West Texas Intermediate crude was at $107.81 a barrel, up 2.27%, following a rise to $108.70, its highest level since April 30.

Rising crude oil prices increases the input costs for oil refiners, exerting pressure on their margins.

The Fuel Price Spike Factor 

Last week, the state-led OMCs elevated petrol and diesel prices by ₹3 per litre each, marking the first fuel price hike in four years. The petrol, diesel price hike came amid a nearly 50% jump in global crude oil prices during the same period.