Oil Prices Surge, Boosting Shares of Reliance Industries and ONGC

Original: Reliance Industries, ONGC shares climb up to 3% as Iran war lifts oil prices by another 30%

The Economic Times•Mar 9, 20262 min

In a Nutshell

Shares of Reliance Industries and Oil and Natural Gas Corporation (ONGC) rose as much as 3.5% following a significant surge in crude oil prices, which increased by over 30% amid escalating tensions in the Middle East. This rise is expected to enhance revenue for upstream oil companies, but may also lead to inflationary pressures in India.

Key Points

01ONGC shares increased by 3.5% to ₹289 amid rising oil prices.
02Crude oil prices surged over 30% due to the US-Israeli conflict with Iran.
03Higher oil prices could significantly impact India's import bill, increasing it by roughly $2 billion for every $1 rise.
04Geopolitical tensions may disrupt Gulf shipping routes and elevate logistics costs.
05Analysts suggest crude oil could reach $150 per barrel if Gulf energy producers halt exports.

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Full Summary

Shares of Reliance Industries and Oil and Natural Gas Corporation (ONGC) saw gains of up to 3.5% on Monday, driven by a significant rise in crude oil prices, which surged over 30% amid escalating tensions from the US-Israeli conflict with Iran. ONGC led the gains, reaching ₹289 on the Bombay Stock Exchange (BSE), while Reliance Industries and Oil India faced slight declines due to a broader market downturn. The main U.S. oil benchmark, West Texas Intermediate (WTI), rose to $118.21 per barrel, marking the highest levels since July 2022. This surge is expected to increase revenues for upstream oil companies, potentially enhancing profit margins and encouraging further investment in exploration. However, rising oil prices could also inflate India's annual import bill by approximately $2 billion for every $1 increase, putting pressure on the trade balance and leading to a depreciation of the Indian rupee. Analysts warn that prolonged tensions could disrupt Gulf shipping routes and increase logistics and insurance costs, further complicating the economic landscape.

Key Figures

3.5%

Increase in ONGC shares

$118.21

Price per barrel of West Texas Intermediate crude oil

₹289

Current price of ONGC shares

$2 billion

Increase in India's annual import bill for every $1 rise in crude prices

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Why It Matters

The rise in oil prices could lead to increased costs for consumers and businesses, potentially raising the prices of goods and services in India.

Who is affected

Consumers, businesses, and importers in India.

What to know

Businesses should prepare for potential cost increases and consumers may need to budget for higher prices.

FAQ

The surge was triggered by escalating tensions in the Middle East, particularly the US-Israeli conflict with Iran.

Every $1 increase in crude prices raises India's annual import bill by roughly $2 billion, which could lead to inflation and affect the trade balance.

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