Oil marketing company (OMC) stocks witnessed strong buying interest on Monday, May 25, after global crude oil prices plunged sharply following optimism surrounding a potential US-Iran agreement.
Hindustan Petroleum Corporation (HPCL) led the rally, rising 4.80% to Rs 408.35 in early trade. Bharat Petroleum Corporation (BPCL) gained 3.55% to Rs 306.10, while Indian Oil Corporation (IOC) advanced 2.98% to Rs 143.62.
The rally in OMC stocks came after MCX crude oil futures dropped 5.08% to Rs 8,702 per barrel. Internationally, Brent crude slipped 4.8% to $98.52 per barrel, falling below the $100 mark for the first time this month, while WTI crude futures declined 5% to $91.76.
The sharp correction in oil prices followed comments from US President Donald Trump over the weekend stating that a deal with Iran had been “largely negotiated” and details would be announced soon. Reports suggested that the agreement could include reopening the Strait of Hormuz, a key global energy shipping route through which nearly one-fifth of global oil and LNG supplies transit.
Lower crude prices are generally positive for state-run oil marketing companies because they improve refining and marketing margins, reduce inventory-related losses, and ease pressure from rising domestic fuel prices.
The move 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. Market participants are now watching whether sustained softness in crude prices could help stabilize domestic fuel pricing and improve profitability outlook for OMC companies.
HPCL touched an intraday high of Rs 412.55, while BPCL climbed to Rs 307.60 and IOC rose to Rs 144.88 during the morning session.
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