Oil India, ONGC Shares Rise Up to 3% As Brent Crude Prices Soar to $78 Amid Israel-Iran Tensions

Shares of upstream oil companies-Oil India and ONGC stuck on an uptrend for the sixth session in a row, gaining up to 3% on June 13 as growing geopolitical tensions in the Middle East tipped off a spike in Brent crude prices.

The intensifying crisis between Israel and Iran have jolted the global oil market with fears of supply disruption given the latter’s close proximity to the Strait of Hormuz, a key trade chokepoint for transporting crude from the Middle East.

Stoked by those fears, Brent crude prices soared 13% on Friday alone, hitting a high of $78.50. Oil prices have also been on an upward trajectory, set to post see their best weekly performance since 2022.

Higher Brent crude prices are a positive for upstream oil producers, boosting their margins, revenue and cashflows. Upstream companies explore, drill, and produce crude oil. So when Brent prices rise, they sell oil at higher rates, directly boosting their topline.

Catch Our LIVE Blog for All Market Updates

Per barrel realisations (revenue per barrel) increase with Brent, which means better returns from every barrel extracted, especially for low-cost producers.

In a televised national address, Netanyahu said Israeli forces had struck Iran’s key nuclear enrichment facility at Natanz, targeted senior nuclear scientists, and hit central elements of the country’s ballistic missile programme. “This operation will continue for as many days as it takes to remove this threat,” he said, hinting at the possibility of an extended campaign.

Iran’s strategic positioning along the northern edge of the Strait of Hormuz, a narrow but critical maritime chokepoint through which more than 20 million barrels of crude pass each day has only added to market jitters. The Strait is the primary shipping route for oil exports from Saudi Arabia, the UAE, Kuwait, and other Gulf producers. Tehran has, in the past, threatened to block the passage in retaliation to external aggression, and fears are mounting that such a move could become a reality if tensions continue to spiral.

Madhavi Arora, Chief Economist at Emkay Financial Services, echoed this sentiment. “A wider Middle East conflict impacting oil flows from key producers like Saudi Arabia, Iraq, Kuwait, and the UAE could have a devastating effect on global energy prices,” she said.