Iran-Israel tensions: IGL, BPCL, HPCL, GAIL, IOC, RIL shares drop up to 4%; Oil India, ONGC up

At least eight BSE oil & gas index constituents including Indraprastha Gas (IGL), BPCL, HPCL and Gail India fell up to 4 per cent, as Brent crude oil futures soared 13 per cent in the wake of fresh tensions between Iran and Israel. 
IGL shares led the fall, tanking 4.11 per cent to Rs 194.80. It was followed by OMC stocks BPCL, HPCL and IOC, which declined 3.86 per cent, 2.80 per cent and 2.20 per cent, respectively. GAIL India dropped 1.95 per cent to Rs 188.45. Reliance Industries slipped 1.60 per cent to Rs 1,416.50. Petronet LNG also fell 1.09 per cent to Rs 300.30. Mahanagar Gas Ltd slipped 2.81 per cent to Rs 1,332.

Gujarat Gas Ltd also declined 2.33 per cent to Rs 465.55. 

"Sometimes bad news come in a flood. Close on the heels of the Ahmedabad air tragedy has come the news of Israel’s attack on Iran. The economic consequences of this Israeli strike can be profound if the attack and counter attack by Iran lingers long. Israel has declared that the operation will last  several days. Brent crude prices have flared up by around 12% to $78. It can rise further if Iran in retaliation closes the straight of Hormuz severely restricting oil supply," said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.

Among upstream players, Oil India rose 2.49 per cent to Rs 479, and ONGC added 0.89 per cent to Rs 250.

"The impact on market will depend on how long the conflict lingers. In the near-term the market will be in a risk-off mode. Sectors that uses oil derivatives as inputs like aviation, paints, adhesives and tyres will be hit hard. Oil producers like ONGC and Oil India will remain resilient," Vijayakumar said.

Israel stated that it had hit Iran’s nuclear facilities, ballistic missile production sites, and military leadership as part of the opening phase of what it described as a long-term campaign aimed at preventing Tehran from developing a nuclear weapon, according to Reuters.

At last count, Brent futures were trading at $78.48, up 13.16 per cent.

Emkay Global said oil prices continue to be volatile, with geopolitical risks (US-Iran, Russia-Ukraine) and trade developments (US-China) driving Brent currently from $60 a barrel a month ago, while OPEC+ continues to raise production. 

That said Emkay Global said fundamental factors would prevail as it does not see any reason for upping FY26E Brent assumption of $70 per barrel. 

On CGDs, JM Financial in a recent note said: "Asian spot LNG price remained elevated ~$12/mmBtu or 19 per cent of Brent (vs. historical average of 12 per cent of Brent) due to Europe’s sustained restocking demand amidst some supply side disruptions and limited addition to LNG export capacity. Sustained high spot LNG price could continue to be a near-term concern for all gas companies, particularly for CGD companies like Gujarat Gas. Further, this can impact domestic LNG demand and, hence, volume for Petronet LNG, GAIL and GSPL."