ONGC, Oil India Surge on Crude Oil Price Spike
By Business Desk
ONGC and Oil India shares climb 2% as WTI crude jumps over 3% amid Middle East tensions. ONGC plans significant investment.
Shares of Oil India and Oil and Natural Gas Corporation (ONGC) each recorded a 2% advance on the BSE during Tuesday’s intra-day trading. This upward movement occurred against a weak broader market, driven by a significant surge in crude oil prices.
- Oil India: Up 2.3% to ₹492.95
- ONGC: Gained 2% to ₹235.95
- BSE Sensex: Down 0.16%
- WTI Crude Oil: Surged over 3%
- Brent Crude: Increased 2.7%
The outperformance of these oil stocks directly correlates with escalating tensions in the Middle East. Concerns over oil supply from the region intensified after US forces struck Iranian rocket launchers near the Strait of Hormuz, prompting retaliatory missile strikes from Iran on US bases in Jordan.
Axis Securities noted that this conflict has reignited fears of disruptions to crude shipments through the critical Strait of Hormuz. WTI Crude Oil prices settled up 2.8%, reaching its highest level since August 21.
Global Crude Reacts to Geopolitical Tensions
Brent crude also experienced a 2.7% increase, reaching its highest point since August 25. The renewed geopolitical friction directly impacted global oil benchmarks, pushing prices upwards significantly.
ONGC’s Strategic Investment & Outlook
Beyond market movements, ONGC plans a substantial investment of approximately ₹1 trillion over the next five years. This capital is earmarked for deepwater and ultra-deepwater exploration, with an aim to drill 87 wells by FY31.
The government’s ₹84,084 crore Samudra Manthan programme supports this initiative. Its primary goal is to boost India’s domestic crude oil and natural gas production, mitigating reliance on imports.
Despite a decline in production from ONGC’s KG 98/2 field, Chairman Arun Kumar Singh stated the company’s integrated upstream and downstream businesses position it well. This structure allows ONGC to effectively manage crude oil price fluctuations within the $60–90 per barrel range.
Analysts at JM Financial Institutional Securities maintain a ‘BUY’ rating on ONGC. They cite potential oil and gas output growth and the company’s status as a strong dividend play, reinforcing confidence in its long-term prospects.