Shares of Hindustan Petroleum Corporation Ltd (HPCL) surged sharply on Monday, May 25, with the stock rising Rs 18.70 or 4.80% to Rs 408.35 in early trade, after global crude oil prices witnessed a steep decline following optimism surrounding a potential US-Iran agreement.
Crude oil prices fell sharply on Monday, with MCX crude futures dropping 5.08% to Rs 8,702 per barrel in early trade. Internationally, Brent crude declined 4.8% to $98.52 per barrel, slipping below the $100 mark for the first time this month, while WTI crude futures fell 5% to $91.76.
The sharp correction in oil prices came after US President Donald Trump stated over the weekend that a deal with Iran had been “largely negotiated” and details would be announced soon. Reports suggested that the proposed agreement could include reopening the Strait of Hormuz, the critical global shipping route through which nearly one-fifth of worldwide oil and LNG supplies normally transit.
Lower crude prices are generally viewed positively for oil marketing companies such as HPCL, BPCL, and IOC as they help improve refining and marketing margins, reduce inventory-related losses, and ease pressure on domestic fuel pricing.
The development also comes after India raised petrol prices for the fourth time in 12 days earlier on Monday, pushing Delhi petrol prices above Rs 102 per litre. Analysts believe that if crude prices remain below $100 sustainably, it could reduce pressure on domestic fuel retailers and improve earnings visibility for state-run oil marketing companies.
At around 9:25 AM, HPCL shares were trading at Rs 408.35 after touching an intraday high of Rs 412.55. The company’s market capitalization stood at approximately Rs 86,900 crore.
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