The Iran-Israel conflict continued to worsen on June 19, weighing of India's oil marketing companies (OMCs) after Brent crude futures inches closer to $77 per barrel, with Iran defiant on the seventh day of strikes, and US President weighing a direct attack on Tehran, even as Russia warned Trump against joining the Middle East war.
Indian Oil Corporation (IOC) shares dropped over 1.4 percent to trade at Rs 139 apiece, while Bharat Petroleum Corporation (BPCL) shares fell over 0.6 percent to hover around Rs 314 apiece. Hindustan Petroleum Corporation (HPCL) shares meanwhile dropped around 0.5 percent to Rs 392 apiece.
While OMC stocks fell, shares of oil refiners gained, with Oil & Natural Gas Corporation (ONGC) shares up nearly 0.6 percent and Oil India up marginally in the green.
The conflict between Israel and Iran has now entered its seventh day, with the two nations continuing to exchange missiles between each other. Iran launched significant number strikes on Israel, attacking its stock market, hospital and state media offices, killing many and injuring several. Israel meanwhile attacked many of Iran’s nuclear sites after its Prime Minister Benjamin Netanyahu vowed to launch the biggest ever attack on Iran until its nuclear programme is destroyed.
The rising tensions in the oil-rich Middle East has triggered supply disruption concerns, which in turn boosted oil prices. Goldman Sachs recently said that lower Iranian supply and risk of wider disruption can even push Brent crude above the $90 per barrel-level.
Notably, US President Trump also recently hinted at US joining the conflict. “I may do it. I may not do it. I mean, nobody knows what I'm going to do,” he told reporters outside the White House. According to analysts, oil prices will shoot up in case US attacks Iran. However, in case it manages to broker peace talks between the two countries, then oil prices will ease.
"The Iran–Israel conflict has reawakened deep geopolitical fault lines, triggering a fresh wave of volatility across global markets. Unsurprisingly, crude oil is at the epicenter. Brent crude has already climbed ~9% in just a week. History offers a clear precedent—after Russia’s invasion of Ukraine, oil prices remained above $100/barrel for several months due to persistent war premiums,” said Harshal Dasani, Business Head at INVasset PMS.
"At the heart of the current crisis lie two major risks. First, a direct Israeli strike on Iranian oil infrastructure could choke supply from one of the world’s key producers. While OPEC has spare capacity, its ability to scale production swiftly—and politically align—is uncertain. Second, and potentially more disruptive, is the looming threat around the Strait of Hormuz. This vital maritime artery handles nearly 25% of global oil shipments. Any obstruction, even temporary, could send shockwaves through energy markets and global supply chains," he added.
(With inputs from agencies)
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