India's Oil Stocks Braced for Impact as Crude Prices Near $100 Mark

Crude oil futures have surged to nearly $96 per barrel as Brent crude approaches the $100 mark. This has significant implications for Indian oil stocks, with some companies poised to benefit from higher crude prices while others may struggle.

The Oil and Natural Gas Corporation (ONGC) is one of the largest oil and gas exploration companies in India, majority-owned by the government. When crude prices rise, ONGC typically sees increased revenue, operating profit, and cash flow due to higher realisations per barrel produced. However, this benefit can be moderated by government pricing policies, taxes, and levies on domestic crude production.

Financial highlights for ONGC show strong growth in the first quarter of FY27, with gross revenue increasing 45% year-over-year to Rs 464.6 billion. The company maintained operating expenditure at a similar level despite inflationary pressures and adverse exchange rate movements. Average crude price realisation was Rs 99.45 per barrel during this period.

ONGC is also taking steps to boost production, including a renewed focus on its Western Offshore operations with a significant capital investment program. The company has expanded its partnership with BP in the Mumbai High field and is implementing several field development initiatives across the Western Offshore portfolio.