The Iran-Israel conflict has cranked up the heat on crude oil prices, and guess what? The oil & gas sector is now sizzling. With tensions showing no signs of cooling, Brent crude is inching its way toward the spicy $95 per barrel mark. If you’re an investor with your ear to the ground, this could be your golden ticket—or should we say, your black gold moment? Experts are waving the green flag for oil producers like ONGC and Oil India, calling them hot picks at these levels. JM Financial isn’t sitting on the fence either. In a fresh note, they’ve stamped a confident ‘Buy’ on both stocks, and here’s why—it seems the current prices are still stuck at a discount, banking on just $65 per barrel crude. So, if Brent decides to hit the fast lane, these stocks could fire up big time. Feeling the FOMO yet?
Keep your eyes glued—this oil rally might just grease your portfolio!
Oil Stocks Set to Fire Up: ONGC and Oil India Poised for Gains as Crude Climbs
Why? Because these energy giants are likely to emerge as key beneficiaries if crude prices keep marching higher. JM Financial points out that the current stock prices of ONGC and Oil India are factoring in a much lower crude realisation—around $65 per barrel—which leaves significant room for upside if oil continues its rally. If you’re tracking the market, this might be the right time to fuel up on these stocks. Keep your radar on Brent’s next move, because as crude heats up, these oil producers could be ready to pump up some strong returns. Stay alert, and watch this space—it’s getting interesting!
Analysts from JM Financial estimate that every dollar increase per barrel in crude oil prices can boost the earnings per share (EPS) of ONGC and Oil India by 1.5-2 per cent. JM Financial highlighted that ONGC and Oil India are likely to post strong earnings growth, supported by robust production increases of 15 per cent and 25 per cent, respectively, over the next one to three years. Analysts are closely monitoring these stocks as potential gainers if crude prices sustain higher levels.
Iranian Crude And Market Risks Keep Investors Cautious
ICICI Securities noted that Iranian crude shipments remain significant, even though most of the supply is directed to China. The brokerage pointed out that Brent prices of $75 per barrel are currently $6-7 per barrel higher than its FY26E base case estimate of $68 per barrel. This scenario poses potential downside risks to Oil Marketing Companies’ (OMCs) EPS estimates, while upstream oil producers like ONGC and Oil India could benefit. ICICI Securities has ‘Buy’ ratings on both ONGC and Oil India, citing that despite rising prices, crude still trades $9 per barrel below the FY22-25 average, indicating balanced supply and demand dynamics.
Strait Of Hormuz Poses Supply Risks As Crude Outlook Stays Mixed
Choice Broking expects crude oil prices could rally to $95 per barrel in the coming weeks if Iran-Israel tensions continue to escalate. However, the brokerage does not anticipate prices will remain elevated for long. Nearly 40 per cent of India’s LNG imports and 50 per cent of its crude oil imports pass through the Strait of Hormuz, making them highly susceptible to disruptions.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said sectors like aviation, paints, adhesives, and tyres will face cost pressures, while oil producers such as ONGC and Oil India are expected to remain resilient. JM Financial, however, maintains a more conservative view, capping Brent oil projections at $80 per barrel and advising a ‘SELL’ on HPCL/IOCL and a ‘HOLD’ on BPCL due to unfavourable risk-reward ratios.
