ONGC vs Oil India: Who Will Benefit Most from Elevated Crude Prices?

The ongoing tensions in West Asia have led to concerns about crude oil prices, which could boost earnings for Indian energy companies such as ONGC and Oil India.

The Strait of Hormuz (SoH), a critical waterway for global oil trade, has seen a significant reduction in daily crossings following attacks by Iran and the US. According to Bloomberg shipping data, there were zero vessels crossing the SoH over the last 10 days, down from an average of 26-28 daily crossings pre-war.

This constrains the evacuation of crude oil and gas through the Strait, which could lead to higher prices for ONGC and Oil India. However, analysts believe that Oil India may offer a higher upside than its counterpart due to its stronger production growth premium.