Indian Refiners Decline Amid Brent Crude Surge Linked to Iran Conflict Indian oil refiners experienced significant losses on Monday as global crude prices surged to a nearly four-year high, driven by escalating tensions between the U.S., Israel, and Iran. The rise in Brent crude prices, which reached $119.5 per barrel—the highest since July 2022—threatened the profitability of Indian refiners and raised concerns about potential government measures to stabilize the market. State-owned refiners Indian Oil (IOC.NS), Hindustan Petroleum (HPCL.NS), and Bharat Petroleum (BPCL.NS) saw their shares fall by 4.6%, 4.9%, and 5.4%, respectively. BPCL’s decline marked its steepest drop since June 2024. The broader Nifty oil and gas index (.NIFOILGAS) dropped 2.7%, while the energy index (.NIFTYENR) fell 2.1%. The oil and gas sector has declined 6.6% since the U.S.-Israeli strike on Iran last week. Reliance Industries (RELI.NS), India’s largest refiner, also fell 0.4% after earlier slipping 2.5%. UBS analysts warned that Indian oil marketing companies face heightened risks due to their reliance on imported crude. The firms’ fuel sales far exceed domestic production, with IOC and BPCL’s sales roughly double their output, and HPCL’s even higher. UBS downgraded IOC and BPCL to “neutral” and HPCL to “sell” from “buy,” while revising fiscal 2027 profit forecasts by 19% for IOC, 15% for BPCL, and 46% for HPCL. The surge in oil prices was fueled by supply cuts from Iraq and Kuwait, alongside earlier LNG reductions from Qatar, as the Middle East conflict disrupted shipping routes. Citi highlighted that refiners’ earnings depend on the duration of the geopolitical crisis, citing risks such as the closure of the Strait of Hormuz and shutdowns in Qatar’s LNG operations, which supply about half of India’s crude and LNG needs.#brent_crude #iran_conflict #us_israel #indian_oil #middle_east_conflict
