In a surprising turn during a bearish market session, shares of crude-sensitive companies rebounded strongly from their respective intraday lows as Brent crude oil prices plunged nearly 4 percent, hovering around $63 per barrel — a level not seen since April 2021. The recovery in energy-related stocks came despite broader market indices—Sensex and Nifty—plunging almost 4 percent amid rising fears of a global recession.

Why Brent Crude Dropped Sharply

The sharp drop in Brent crude prices was triggered by heightened global recession concerns, especially after former US President Donald Trump announced a series of reciprocal tariffs on several countries, sparking fresh trade war fears. These measures, viewed as protectionist, raised alarms in global markets and weighed heavily on commodity prices.

Adding to the pressure, Goldman Sachs revised its Brent crude price forecast for 2026 down to $58 per barrel, citing:

• Elevated recession risks

• Potentially higher-than-expected supply from OPEC+

Goldman Sachs also indicated that oil prices could climb higher than expected if the US reverses tariffs and reassures the market.

Recession Fears Deepen: What Global Banks Are Saying

• Goldman Sachs forecasted a 45% chance of the US entering a recession in the next 12 months.

• JPMorgan was even more bearish, estimating a 60% probability of a global and US recession.

These warnings amplified market volatility, pushing crude prices lower and adding stress to equities.

Winners Amid the Fall: Oil Marketing Companies (OMCs)

The biggest beneficiaries of the fall in crude oil prices were oil marketing companies (OMCs) such as:

• Hindustan Petroleum Corporation Ltd (HPCL)

• Bharat Petroleum Corporation Ltd (BPCL)

• Indian Oil Corporation Ltd (IOC)

As crude oil is a key input cost for these companies, the decline in prices translates into better margins and lower under-recoveries.

HPCL Stock Performance:

• Bucked the market trend to trade in the green, even as broader indices fell.

• Was up nearly 2 percent to Rs 365 per share.

• Recovered around 6 percent from its intraday low.

BPCL and IOC:

• Both stocks initially traded deep in the red.

• However, rebounded sharply by nearly 5 percent from their respective day’s lows.

• Still, they closed the session over 1 percent down, showing resilience compared to the overall market.

ONGC Dips Despite Crude Price Movements

Unlike OMCs, Oil and Natural Gas Corporation (ONGC) — a crude oil producer — saw its shares decline sharply by around 4 percent. This divergence is expected, as falling crude prices impact revenue negatively for upstream companies.

ONGC’s decline highlights how oil producers and oil marketers react differently to global crude price trends. While lower crude prices benefit refiners and marketers, they hurt producers who earn by selling oil.

Broader Market Trends: Sensex and Nifty Tumble

• Sensex and Nifty, India’s key benchmark indices, dropped close to 4 percent in the trading session.

• Bearish sentiment was widespread, driven by:

  • Geopolitical tensions

  • Global trade war concerns

  • Economic slowdown fears

  • Crude oil volatility

Despite this, crude-sensitive stocks provided some pockets of strength and recovery, especially in the oil and gas space.

What Does This Mean Going Forward?

The current market volatility, coupled with a downward revision in crude price forecasts, has far-reaching implications:

For Investors:

• OMC stocks may continue to perform better in the short term if crude prices stay subdued.

• Upstream companies like ONGC may remain under pressure, especially if demand weakens globally.

• Investors should remain cautious about volatility in global oil markets due to policy unpredictability.

For Consumers:

• Falling global crude prices may lead to a decline in domestic fuel prices, depending on how much of the cost benefit is passed on by oil marketing companies.

• Reduced inflationary pressure due to lower fuel costs could provide short-term relief in essential goods pricing.

For Policymakers:

• With recession risks looming, there may be a need for fiscal and monetary policy adjustments.

• The oil pricing mechanism will be a key focus area in shaping inflation, trade balance, and overall economic stability.

Oil Price Forecasts and the OPEC+ Factor

A major risk that remains is the future course of action by OPEC+, the alliance of major oil-producing countries. If OPEC+ unexpectedly increases output, it may add further pressure on prices.

Goldman Sachs’ forecast of Brent at $58 per barrel by 2026 implies:

• An oversupply scenario

• Potential stagnation or weakening in demand

• Persistent recession-driven oil price caps

However, any policy reversal by the US administration or a de-escalation of trade tensions could boost demand sentiment, driving prices back up and reversing gains made by OMCs.

Conclusion

The sharp drop in Brent crude oil prices to $63 per barrel offered a much-needed breather to crude-sensitive Indian companies, especially oil marketing giants like HPCL, BPCL, and IOC, which staged strong intraday recoveries even amid a broader market sell-off.

However, recession risks, OPEC+ supply concerns, and geopolitical instability continue to cast a long shadow over global markets. For Indian investors, the scenario underscores the importance of tracking global cues, especially for sectors sensitive to commodity price fluctuations.

The Upcoming IPOs in this week and coming weeks are Aten Papers & Foam.

The Closed IPOs are  Infonative Solutions Limited, Spinaroo Commercial Limited,Retaggio Industries Limited.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in .Choice Broking FinX