Shares of Indian Oil Corporation (IOC) surged nearly 3% on Monday, May 25, with the stock rising Rs 4.15 or 2.98% to Rs 143.62 in early trade, after global crude oil prices witnessed a sharp correction following fresh optimism around a potential US-Iran agreement.
Crude oil prices fell sharply on Monday, with MCX crude futures declining 5.08% to Rs 8,702 per barrel in early trade. Internationally, Brent crude dropped 4.8% to $98.52 per barrel, slipping below the $100 mark for the first time this month, while WTI crude futures declined 5% to $91.76.
The sharp fall 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 indicated that the agreement could include reopening the Strait of Hormuz, through which nearly one-fifth of global oil and LNG shipments normally pass.
Lower crude prices are generally viewed positively for oil marketing companies such as IOC, BPCL, and HPCL, as they help reduce input cost pressures, improve marketing margins, and ease concerns around fuel pricing and inventory losses.
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 sustained weakness in crude prices could reduce pressure on domestic fuel pricing and improve profitability outlook for state-run oil retailers.
At around 9:20 AM, IOC shares were trading at Rs 143.62, while the stock touched an intraday high of Rs 144.88. The company’s market capitalization stood at approximately Rs 2.03 lakh crore.
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