On June 26, 2025, shares of major Oil Marketing Companies (OMCs) in India – namely Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL) and Indian Oil Corporation (IOC) – witnessed a strong uptrend in the stock market. The surge came as Brent crude prices slipped below $70 per barrel, easing cost pressure concerns for the downstream oil sector.

This recovery in OMC stocks came after a period of sustained pressure due to rising crude oil prices. The ceasefire between Israel and Iran, which was holding firm, significantly cooled down geopolitical tensions in the Middle East, a major oil-producing region. This resulted in a noticeable drop in global crude oil benchmarks such as Brent and WTI.

Crude Oil Prices Fall Below $70

As of Thursday, Brent crude futures traded around $68.21 per barrel, while WTI crude hovered around $65.48 per barrel. These levels are significantly lower than recent highs driven by fears of prolonged geopolitical conflict in the Middle East.

The cooling of crude oil prices is a positive signal for oil marketing companies, which depend heavily on imported oil to meet domestic fuel demand. Lower crude prices translate to reduced input costs, which in turn help OMCs improve their refining margins and profitability.

Stock Performance of OMCs

By 1:30 PM on June 26:

• BPCL shares were trading at ₹325.3, up 1.8%

• HPCL shares stood at ₹415.1, up 1.8%

• IOC shares were quoting ₹145.06, gaining 2.2%

Over the last five trading sessions, following the ceasefire announcement, these stocks have gained up to 6%, marking a strong turnaround from the previous month’s weakness.

Impact of Crude Oil on OMCs

OMCs are highly sensitive to crude oil price movements. Here's how:

• When crude oil prices rise, input costs for OMCs shoot up.

• However, due to government-imposed price controls or market dynamics, OMCs may not always pass on the entire cost to consumers.

• This squeezes their margins, making the stocks less attractive during periods of rising oil prices.

Therefore, a fall in crude prices, as seen this week, often results in a relief rally in OMC stocks, since refining and marketing margins improve, and the probability of under-recoveries decreases.

Contrast with Oil Exploration Companies

While OMCs benefit from lower oil prices, the reverse is true for oil exploration and production companies such as:

• ONGC (Oil and Natural Gas Corporation)

• Oil India Limited

These companies generally earn more revenue when oil prices are high, as their costs remain largely fixed, while per barrel realizations increase. So, during a crude price dip, investors may shift focus away from these upstream players and rotate capital into downstream companies like BPCL, IOC, and HPCL.

Geopolitical Stability Drives Market Sentiment

The Israel-Iran ceasefire appears to have provided a major breather to the global energy markets. As the Middle East conflict stabilizes, crude oil prices are correcting to pre-crisis levels, reducing fears of supply disruptions.

This development is crucial for India, as the country is the third-largest oil importer globally, and its economy is highly sensitive to crude price fluctuations. Lower prices support macroeconomic stability, reduce the import bill, and help tame inflation.

The positive sentiment has spilled over into the broader market, with energy-related sectors and indices showing improved performance.

Investor Sentiment and Technical View

Analysts note that BPCL, IOC, and HPCL stocks had been under selling pressure throughout the past month as Brent crude remained volatile. Now, with technical breakouts visible, and cooling crude, the rally may continue in the short term, especially if crude stays below $70 per barrel.

On the charts:

• BPCL may face resistance at ₹332–₹335, with support near ₹318

• IOC could test ₹148–₹150, with strong support at ₹140

• HPCL looks poised to reclaim ₹420, with support at ₹407

Conclusion

The sharp decline in global crude oil prices—especially Brent crude falling below $70—has triggered a rally in Indian OMC stocks. BPCL, HPCL, and IOC all posted strong intraday gains, reversing a month-long trend of underperformance.

With Middle East tensions easing, fuel input costs for India’s oil marketing giants are expected to remain manageable, setting the stage for improved profitability and stable stock performance in the near term.

Going forward, investors will closely track:

• Movement of Brent and WTI prices

• Updates on Israel-Iran ceasefire

• Demand-supply data from OPEC+

• Domestic fuel pricing and refining margin trends

For now, the OMC segment looks well-positioned to outperform, especially if crude oil prices remain below $70, and geopolitical stability persists.

The Upcoming IPOs in this week and coming weeks are Crizac, Silky Overseas, Vandan Foods, Pushpa Jewellers, Cedaar Textile, Adcounty Media India, Marc Loire Fashions, Neetu Yoshi.

The Current active IPO are Moving Media Entertainment, Valencia India, PRO FX Tech, Ace Alpha Tech, Indogulf Cropsciences, Suntech Infra Solutions, Rama Telecom, Supertech EV, Sambhav Steel Tubes, HDB Financials, Abram Food, Shri Hare-Krishna Sponge Iron, Icon Facilitators, Globe Civil Projects, Ellenbarrie Indutrial Gases, Kalpataru, AJC Jewel.

The Closed IPOs are Aakaar Medical Technologies, Safe Enterprises Retail Fixtures, Mayasheel Ventures.

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