Brent Oil Price Surge to Two-Week High Triggers 3% Decline in Crude-Sensitive Stocks

Global Oil Prices Surge Amid Escalating Geopolitical Tensions

Shares of crude-sensitive firms such as Bharat Petroleum Corporation Limited fell by up to 3 percent on Monday as crude oil prices surged amid escalating geopolitical tensions in West Asia.

Oil marketing companies remained under pressure as higher crude prices raised concerns over a squeeze in refining and marketing margins. The surge in crude prices was driven by Brent crude rising for the third straight session and touching a two-week high, advancing towards USD 112 per barrel after gaining nearly 8 percent last week. West Texas Intermediate climbed above USD 108 per barrel.

Crude prices moved higher after US President Donald Trump renewed pressure on Iran to reach a deal to end the ongoing conflict and reopen the Strait of Hormuz, a key global oil transit route. Trump's social media post on Sunday stated that "For Iran, the clock is ticking, and they better get moving, FAST, or there won't be anything left of them."

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The impact of the surge in crude prices was evident in the stock market, with shares of Hindustan Petroleum Corporation declining up to 2 percent to Rs 359.25 per share on the NSE. Bharat Petroleum Corporation fell up to 2 percent to Rs 278.80, while Indian Oil Corporation dropped as much as 2.5 percent to Rs 131.09.

Shares of Eternal slipped 2.68 percent to Rs 234.71 per share on the NSE amid concerns that higher LPG prices and supply disruptions could impact restaurant operations and food delivery services. Among airline stocks, shares of InterGlobe Aviation, which operates IndiGo, fell up to 1.28 per cent, while SpiceJet Limited declined 3.2 per cent. Higher crude oil prices increase aviation turbine fuel costs, which form a major part of airlines' operating expenses, impacting profitability.

Oil prices have risen more than 50 percent since the US and Israel first launched attacks on Iran at the end of February. Further pressure on global supply emerged after the Trump administration allowed a waiver for Russian crude sales to lapse despite a request from India for an extension. Energy infrastructure in the Persian Gulf also came under attack over the weekend, with a drone strike triggering a fire at a nuclear facility in the United Arab Emirates, highlighting continued risks to energy supply chains in the region.

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Since the ceasefire began on April 8, Trump has repeatedly warned of resuming the bombing campaign that started on February 28, adding to concerns over disruptions in global oil supplies.