Shares of oil marketing companies were under pressure on June 12 after oil prices rose more than 4%, their highest in more than two months, due to Middle East tensions.
At 10:20 am on June 12, Hindustan Petroleum Corp Ltd (HPCL) shares were trading 4.5% lower at Rs 396 apiece. Shares of Bharat Petroleum Corporation Ltd (BPCL) and Indian Oil Corporation Ltd (IOC) were trading 3.65% and 2% lower, respectively. Shares of MRPL were trading 1.6% lower at Rs 143.58 apiece.
Meanwhile, shares of oil exploration companies were on the rise. Oil and Natural Gas Corporation Ltd (ONGC) stock was trading 2% higher and Oil India was 4% higher at 10:25 am.
Geopolitical concerns heightened after Iran said it will strike U.S. bases in the Middle East if nuclear talks fail and conflict arises with Washington.
Sources said the US was preparing to evacuate its Iraqi embassy due to heightened security concerns in the Middle East, reported Reuters.
Brent crude futures settled $2.90, or 4.34%, higher to $69.77 a barrel. U.S. West Texas Intermediate crude gained $3.17, or 4.88%, to $68.15. Both Brent and WTI reached their highest since early April.
Surprised traders bought crude futures on reports the U.S. was preparing to evacuate its embassy in Iraq, OPEC's No. 2 crude producer after Saudi Arabia.
Escalating security risks in the Middle East is a negative for India as it could trigger a rise in Brent crude prices, two analysts told Reuters.
The fall in OMC stocks comes a day after gains seen in them as an US body expected oil prices to fall in near-term.
The US Energy Information Administration sees oil prices falling in the near term due to a rise in global inventories. The organisation sees Brent crude oil falling to $61 per barrel by end of 2025 from $64 per barrel in May, and averaging $59 per barrel in 2026.
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