ONGC, Oil India Decline As Crude Oil Prices Extend Losses Below $90 Per Barrel

Shares of Oil and Natural Gas Corporation (ONGC) and Oil India came under selling pressure on Friday after international crude oil benchmarks continued their downward move amid hopes of a diplomatic breakthrough between the U.S. and Iran.

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In early trade, ONGC fell as much as 2% to ₹247.55 on the NSE, while Oil India declined 1.9% to ₹421.05. The weakness in both stocks followed a sharp correction in global oil prices, which directly influence earnings prospects for upstream exploration and production companies.

Crude Prices Continue To Retreat

Brent crude futures dropped $1.21, or 1.3%, to $89.17 a barrel, while U.S. West Texas Intermediate (WTI) crude slipped $1.23, or 1.4%, to $86.48 a barrel. On a weekly basis, Brent was down 4.2% and WTI had declined 4.4%.

The fall came after U.S. President Donald Trump indicated progress in discussions with Iran and announced the cancellation of planned military action. The development reduced concerns over a prolonged conflict that could disrupt energy supplies from the region.

Lower crude oil prices are generally viewed as negative for upstream oil producers because their revenue and profitability remain closely linked to prevailing international oil rates.

Diplomatic Developments Ease Supply Concerns

Investor sentiment was positively impacted by the signals emanating from negotiations between Washington and Tehran that could lead to a resolution of the situation. Trump said the negotiations have made great strides, while at one point he said that the United States had managed to put a stop to the Iran problem.

There were prospects that the possibility of significant interruptions to supplies in the region would not materialize, hence a general reevaluation of risks in commodities markets. Crude oil has experienced tremendous price swings in recent months due to the fear of geopolitics influencing global oil supply.

Even with the recent decline in crude oil, prices are still higher than before the situation escalated in the region.

Global Markets Respond Positively

Improved risk appetite extended beyond commodity markets. As per Bloomberg, the MSCI Asia Pacific equity index gained 3.3%, recording its strongest single-day rise in two months. South Korea’s Kospi advanced about 8%, supported by gains in technology-related stocks.

U.S. equity futures also moved higher following strong gains on Wall Street in the previous session.
Meanwhile, investor attention remains on major developments in global capital markets. SpaceX to begin trading at Nasdaq after $75 billion flotation from initial public offer. The IPO came off with an offer price of $135 a share, placing the value of SpaceX at $1.77 trillion.

However, for energy shares in India, attention was still drawn to the falling crude oil prices, which negatively affected the performance of companies such as ONGC and Oil India.