BPCL, HPCL, IOC stocks rally up to 3% as crude oil prices drop to one-month low

Shares of oil marketing companies (OMCs), including BPCL, HPCL, and IOCL, rallied up to 3% on Wednesday, November 26. HPCL’s share price jumped as much as 2.6% to ₹466.80 apiece, while BPCL rallied 3% to ₹365.85 and IOC gained as much as 1.2%.

The three state-run OMCs—Hindustan Petroleum Corporation Ltd, Bharat Petroleum Corporation Ltd, and Indian Oil Corporation Ltd—saw a sharp movement in their share prices, rebounding from the recent weakness as the drop in global crude prices brought sentiment back to these counters, which were also on track to extend their yearly return to the third consecutive year in 2025.

Brent crude futures dropped to $61 per barrel in Tuesday’s session, marking the lowest level in a month, while WTI crude oil futures also touched a one-month low at $57 per barrel as traders’ concerns grew that the market is being hit by higher crude supply than demand.

These concerns surfaced amid signs that a Ukrainian peace agreement may be approaching, which could lead to lifted restrictions on Russian crude.

US President Donald Trump described the negotiations as nearly complete, citing only a few remaining issues, while Ukraine’s top aide in Geneva called the talks a promising start toward reaching an agreement.

A Ukrainian official told Reuters that Kyiv supported the essence of a framework for peace after talks with the U.S. in Geneva, but some of the most sensitive issues of the framework remained to be discussed between the countries’ presidents.

Ukrainian President Volodymyr Zelenskiy could visit the U.S. in the next few days to finalise a deal with President Donald Trump to end Ukraine’s war with Russia, Reuters reported, quoting Kyiv’s national security chief, Rustem Umerov.

A Ukraine–Russia peace deal could lead to sanctions being lifted on Moscow, unleashing previously restricted oil supplies into the market.

Impact on OMCs

A fall in crude oil prices generally works in favour of oil marketing companies (OMCs) like BPCL, HPCL, and IOC as crude forms the bulk of their input cost. Cheaper crude lowers the overall expense of refining and fuel production.

If petrol and diesel pump prices are not reduced in proportion to the drop in crude, OMCs are able to retain higher marketing margins, which directly strengthens their earnings.

Softer crude prices also help bring down the country’s import bill and ease the companies’ working capital needs, leading to better cash flow. Moreover, when OMCs carry inventory bought at lower prices, they can book inventory gains if the final products are sold at current, relatively higher market prices.

(With inputs from Reuters)

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