Oil Prices Spike Amid US-Iran Tensions, Boosting Indian Energy Shares
Oil prices surged more than 3% after US forces struck Iranian rocket launchers near the Strait of Hormuz, sparking renewed fears of supply disruptions from the region. The move reignited tensions between the US and Iran, with President Trump threatening further action against Kharg Island. Oil India and ONGC shares rose 2% each in Tuesday's trade.
WTI Crude Oil prices spiked following the incident, which increased concerns about crude shipments through the critical waterway. Axis Securities noted that the resumption of fighting between the US and Iran has renewed fears of supply disruptions from the world's key crude-producing region.
Oil India shares rose 2.3% to ₹492.95, while ONGC gained 2% at ₹235.95 on the BSE in an otherwise weak market. The BSE Sensex was down 0.16% at 76,834 at 01:58 PM.
Analysts view Oil India and ONGC as potential long-term investment bets, citing their plans to make new discoveries and enhance exploration efforts. ICICI Securities noted that ONGC is well-positioned to handle crude oil price fluctuations in the $60-90 per barrel range due to its integrated upstream and downstream businesses.