Shares of major state-owned oil marketing companies came under heavy selling pressure on Monday as global crude oil prices surged past the $100-per-barrel mark, triggering sharp declines in energy stocks and weighing on the broader equity market.
Stocks of Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation dropped by as much as nearly nine per cent during early trading, reflecting investor concerns that the surge in crude prices could strain the financial position of domestic refiners and fuel retailers.
The fall in oil marketing company stocks followed a sudden spike in global crude prices as tensions involving Iran disrupted energy flows through the Strait of Hormuz, one of the world’s most critical oil transit routes. The disruption rattled global markets and triggered fears of tightening energy supplies.
Global crude benchmarks briefly moved beyond the $100-per-barrel level, with prices nearing the $110 mark during volatile trading, marking one of the sharpest weekly gains in oil futures since the early 1980s.
On the domestic markets, shares of Indian Oil Corporation fell 7.29 per cent by around 11.20 am to an intraday low of Rs 156.30 on the Bombay Stock Exchange, compared to its previous close of Rs 168.60. The stock was among the most actively traded PSU energy stocks during the session.
Bharat Petroleum Corporation also witnessed heavy selling pressure, with the stock declining 8.43 per cent to touch an intraday low of Rs 322.95 from its earlier close of Rs 352.70 on the BSE.
The steepest decline among the three companies was recorded by Hindustan Petroleum Corporation. The stock dropped 8.67 per cent to an intraday low of Rs 370.10 from its previous closing level of Rs 405.25, according to BSE trading data.
Market participants attributed the sharp fall in these stocks to concerns that a prolonged rise in crude oil prices could compress refining margins and increase the financial burden on state-owned oil marketing companies, particularly if retail fuel prices remain regulated.
The rise in oil prices was linked to escalating tensions in the Middle East that disrupted energy shipments and reduced supply from some major oil producers in the region. With the Strait of Hormuz effectively closed to cargo movement during the conflict, global energy markets experienced immediate supply concerns.
The strait serves as a vital corridor for oil shipments from the Gulf region to global markets. Any disruption to this route typically leads to sharp price volatility in international crude benchmarks due to fears of supply shortages.
The geopolitical tensions also triggered reactions from global political leaders. Donald Trump defended the surge in oil prices in remarks posted on the social media platform Truth Social, suggesting that the spike was a temporary consequence of confronting Iran’s nuclear threat.
He wrote that short-term oil prices would drop rapidly once the threat from Iran’s nuclear programme is addressed, adding that the current rise in crude costs was a small price to pay for global safety and peace.
The surge in oil prices also weighed on the broader equity markets in India, with benchmark indices trading sharply lower during the session. The BSE Sensex and Nifty 50 both moved into negative territory as investors reacted to the global developments.
By late morning trade, the Sensex had declined 3.16 per cent to 76,424.55, while the Nifty 50 was down 3.07 per cent at 23,697.80, reflecting broad-based selling across sectors.
Analysts noted that energy stocks remain particularly sensitive to fluctuations in crude oil prices because of their direct exposure to global supply dynamics. For India, which imports a significant portion of its crude oil requirements, sustained price increases can also have wider implications for inflation and fiscal balances.
Market volatility is expected to persist as investors closely track developments in the Middle East and assess the potential duration of supply disruptions affecting global oil markets.
