CLSA Sees Tighter Crude Market Ahead, Boosts Upstream Producers

Analysts at CLSA are predicting a tighter crude oil market in the next two to three months, which could push prices higher and benefit upstream oil producers such as ONGC and Oil India.

According to CLSA's report 'So tight, yet so light', around 70% of the supply shortfall from Strait of Hormuz countries between March and July 2026 has been met through releases from strategic reserves in China, the US, and other OECD countries. However, this temporary support is expected to weaken.

CLSA sees ONGC as having the highest potential upside at 71%, with a target price of Rs 405. The brokerage also has an 'Outperform' rating on Oil India, with a target price of Rs 550 and 12.4% upside.

The key trigger for both stocks is a tighter crude market, alongside stronger production growth. CLSA expects ONGC's production ramp-up in the second half of FY26 to be a key catalyst for the stock, while Oil India's management has guided for a steep increase in oil and gas production over the next three to four years.