Oil and gas shares experienced significant gains on Tuesday, May 19, following President Trump's escalated warnings to Iran. According to reports from LiveMint, major Indian oil firms saw shares rise nearly 4% as falling crude prices are expected to enhance profitability. The rally was driven by optimism for stability in global crude supply, but investor confidence has been tempered by Trump's latest social media post warning Iran that 'the clock is ticking, and they better get moving, FAST, or there won't be anything left of them' following a call with Israeli Prime Minister Benjamin Netanyahu.
Oil prices have shown mixed signals amid escalating tensions, with Brent crude gaining 0.7% to $110.05 per barrel and US benchmark West Texas Intermediate (WTI) crude trading 1% higher to $106.49 per barrel. As reported by LiveMint, oil prices had declined after Trump said he had called off a planned military strike on Iran following appeals from key Persian Gulf allies. However, recent developments show Brent crude was trading at roughly $70 a barrel in late February before the start of the Iran war, highlighting the significant price appreciation since the conflict began. Trump indicated in a social media post that leaders from Saudi Arabia, Qatar and the United Arab Emirates had urged him to 'hold off' on the planned strike against Iran, as 'serious negotiations are now taking place.'
According to LiveMint reports, shares of major Indian oil companies showed strong performance amid hopes of better profitability. Indian Oil Corporation, Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL), Gujarat Gas, Indraprastha Gas, and Adani Total Gas rose nearly 4% as falling crude prices are expected to lower raw material costs and boost refining and marketing margins. The gains reflect investor optimism about improved operational efficiency for downstream oil marketing firms, though current market volatility from Trump's latest warnings has created additional uncertainty.
As reported by LiveMint, crude oil prices have risen sharply in recent days amid concerns that rising tensions and the near-complete shutdown of the Strait of Hormuz could significantly disrupt energy supplies from the Persian Gulf. ING commodities strategists Warren Patterson and Ewa Manthey noted that 're-escalation risks are increasing' while there has been a pickup in shipping activities over the past week around the strait. The oil market is reacting to the lack of tangible results from the Iran war after last week's summit between Trump and Chinese President Xi Jinping in Beijing, even as the White House said both the US and China had agreed that the Strait of Hormuz must remain open. Trump said last week that Xi told him China 'would like to be of help' in negotiating an end to the war, though it remains unclear how Beijing might facilitate such negotiations.
