HPCL, BPCL, IOC Fall as Oil Prices Jump; ONGC Gains on Middle East Tensions

Markets in India had a rocky start to the week on Monday, June 23, 2025. Rising tensions in the Middle East pushed global crude oil prices sharply higher, and while that gave a boost to upstream producers like ONGC and Oil India, it hit oil marketing companies (OMCs) hard. Stocks like HPCL, BPCL, and IOC ended the day in the red, feeling the pinch of shrinking margins.

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Crude Oil Soars as Middle East Heats Up

Brent crude has climbed about 13% in just ten days, now hovering close to $78 a barrel. Why? Tensions between Israel and Iran have flared up again. Iran’s parliament even floated the idea of shutting down the Strait of Hormuz, a major route for global oil shipments. That move has sparked fears of supply disruptions and raised the stakes for global oil markets.

OMCs Struggle with Rising Costs

As oil prices go up, it’s getting tougher for Indian oil retailers. Shares of HPCL, BPCL, and IOC dropped by as much as 4%. These companies already work with tight margins, and because they can’t always pass rising costs onto customers, thanks to government price controls, they're now dealing with added pressure on profits.

Many brokerages say things are likely to stay mixed for India’s oil and gas sector. If crude prices stay around $73–$74 per barrel, downstream companies like OMCs could see earnings take a hit. But on the flip side, producers like ONGC could actually gain from this price surge.

ONGC and Oil India See Stock Gains

While OMCs are struggling, upstream companies are enjoying the rally. ONGC's stock rose more than 3%, and Oil India jumped nearly 5%. When crude prices rise, these companies make more money per barrel, simple as that. Analysts believe that for every $1 increase in crude, ONGC’s earnings per share could go up by 1.5% to 2%. That’s making the stock more appealing to investors.

Wider Market Feeling the Strain

It’s not just the oil sector feeling the heat. The surge in crude prices and the possibility of deeper Middle East conflict dragged down the broader Indian markets. The Sensex fell over 900 points, and the Nifty dropped below 24,850. Investors are worried about inflation, a growing current account deficit, and the rising cost of oil imports.

The rupee also took a hit, slipping by 30 paise to 86.34 against the US dollar. The spike in crude and the market sell-off added pressure to the currency.

Looking Ahead

This situation is a classic example of how global oil dynamics cut both ways. Higher crude prices are great for companies that produce oil, but tough for the ones that sell it. If you’re an investor, it’s worth keeping an eye on the Middle East. Any signs of escalation or resolution could swing oil prices, and by extension, the market itself, in a big way.

For now, the markets remain on edge, with oil as the wildcard in the room.