Oil and Natural Gas Corporation (ONGC) and Oil India shares moved higher by 2 per cent each on the BSE in Tuesday's intra-day deals, according to reports from Business Standard. The Oil India share price rose 2.3 per cent to ₹492.95, while ONGC gained 2 per cent at ₹235.95 on the BSE. In comparison, the BSE Sensex was down 0.16 per cent at 76,834 at 01:58 PM, highlighting the energy sector's outperformance in an otherwise weak market.
WTI Crude Oil prices surged more than 3 per cent after US forces struck Iranian rocket launchers near the Strait of Hormuz, as reported by Business Standard. According to Reuters, oil prices gained on Tuesday as the resumption of fighting between the US and Iran in the Middle East renewed fears of supply disruptions from the world's key crude-producing region. Brent crude futures were up 56 cents, or 0.6%, to $91.05 a barrel at 0044 GMT, while U.S. West Texas Intermediate crude gained 83 cents, or 1%, to $86.59. In the previous session, Brent closed up 2.7 per cent, at one point reaching its highest since August 25, while WTI settled up 2.8 per cent, touching its highest since August 21.
The US strikes on Iranian targets and Tehran's retaliatory attacks raised tensions, while President Trump threatened further action against Kharg Island, according to Axis Securities commodities report cited by Business Standard. Iran retaliated with missile attacks on US bases in Jordan, reigniting fears that renewed tensions could disrupt crude shipments through the critical waterway. US President Donald Trump on Monday warned of additional strikes against Iran after the two countries exchanged direct attacks for the first time in a month on Sunday, raising tensions in a conflict that had recently shifted into an economic standoff. Tim Waterer, chief market analyst at KCM, noted that "These bring the potential for Iranian retaliation back into the equation. That in turn raises the prospect of damage to energy infrastructure around the Gulf and adds fresh uncertainty for shipping through the Strait of Hormuz."
The number of visible commodity vessels transiting the Strait of Hormuz fell to just five per day over the weekend, according to shipping data from Kpler, as reported by TradingView News. As reported by Commerzbank analysts, "The hopes that had emerged last week for an upcoming reopening of the Strait of Hormuz to shipping have been dealt a severe blow." Efforts by mediators including Qatar and Oman to broker a deal to reopen the Strait of Hormuz, which carried about a fifth of global oil supplies before the war erupted in late February, have so far failed to gain traction. Iran closed the waterway after the U.S. and Israel attacked the country February 28, with the United Kingdom Maritime Trade Operations agency (UKMTO) reporting on Tuesday that a tanker reported being hit by three projectiles while sailing out of the Strait of Hormuz, though no casualties or environmental impact were reported.
ONGC Chairman and CEO Arun Kumar Singh revealed that India's crude oil import strategy is increasingly price-driven, with at least 60 per cent of India's oil imports being a function of the price in that particular month or M+2. As reported by Oilprice.com, India is increasingly sourcing crude from a wider range of suppliers including Russia, West Africa, Venezuela, Brazil, and the U.S. to offset disrupted Middle Eastern supply. Singh emphasized that "It is some geopolitical issue which is causing trouble, and ultimately economics prevail. Geopolitical disturbances could be for some months or years, but ultimately world economy prevails." Despite India's massive 90% dependence on crude oil imports, the country remains well-positioned to find alternative crude sources when geopolitical issues disrupt traditional supply chains.
According to reports from Business Standard, ONGC plans to make a major push into deepwater and ultra-deepwater exploration, with an investment of around ₹1 trillion over the next five years and plans to drill 87 wells by FY31. The company aims to make new discoveries to arrest the decline in India's domestic crude oil and natural gas production, with the government's ₹84,084 crore Samudra Manthan programme also supporting offshore exploration. ONGC plans to drill 8 wells in FY27, 10 in FY28, 20 in FY29, 22 in FY30 and 27 in FY31.
As reported by Business Standard, ONGC Chairman Arun Kumar Singh said the company is well positioned to handle crude oil price fluctuations in the $60–90 per barrel range, as its integrated upstream and downstream businesses help offset the impact of changing oil prices. JM Financial Institutional Securities maintains a 'BUY' rating on ONGC with an unchanged target price of ₹300, based on its FY28E onwards Brent crude price assumption of $70/bbl. The stock trades at 6.2x FY28E consolidated EPS and 0.7x FY28E BV, making it a solid dividend play with potential for 4–5 per cent dividend yield. Analysts polled by Reuters in August expect oil prices to remain above $80 a barrel in 2026 as shipping disruptions continue, with the conflict showing signs of becoming a prolonged issue despite recent economic standoffs.
