HPCL, BPCL, IOCL shares falls over 7%, impacts badly amid crude oil volatility

Crude-sensitive stocks were adversely affected following a rise in Brent oil prices.

HPCL, BPCL, IOCL shares falls over 7%, impacts badly amid crude oil volatility
HPCL, BPCL, IOCL shares falls over 7, impacts badly amid crude oil volatility

Shares of India's state-run oil marketing companies—Hindustan Petroleum Corporation Ltd. (HPCL), Bharat Petroleum Corporation Ltd. (BPCL), and Indian Oil Corporation Ltd. (IOC)—experienced losses of up to 7% on Monday, January 13. HPCL's shares declined by 7% today, while BPCL and IOC dropped by 3% and 4%, respectively.

Crude-sensitive stocks were adversely affected following a rise in Brent oil prices. Additionally, shares of paint and tire manufacturers also fell. Companies such as Asian Paints, Berger Paints, Shalimar Paints, Akzo Nobel, CEAT, Apollo Tyres, and Balkrishna Industries saw declines of up to 3%.

Brent crude rose above $81 a barrel, reaching its highest price in more than four months, as wider U.S. sanctions are expected to impact Russian crude exports to major buyers such as China and India.

Brent crude futures climbed $1.48, or 1.86%, to $81.24 a barrel by 0113 GMT after hitting an intraday high of $81.49, the highest level since August 27. Meanwhile, U.S. West Texas Intermediate crude rose $1.53, or 2%, to $78.10 a barrel after reaching a high of $78.39, the most since October 8, 2024.

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Brent and WTI have risen by more than 6% since January 8 and both contracts surged after the US Treasury imposed wider sanctions on Russian oil on Friday. The new sanctions included producers Gazprom Neft and Surgutneftegas, as well as 183 vessels that have shipped Russian oil, targeting the revenue Moscow has used to fund its war with Ukraine.

Russian oil exports will be hurt severely by the new sanctions, pushing China and India, the world’s top and third largest oil importers respectively, to source more crude from the Middle East, Africa and the Americas, which will boost prices and shipping costs, traders and analysts said.

"The new Russian sanctions from the outgoing administration are a net addition to at-risk supply, adding more uncertainty to the (first quarter) outlook," RBC Capital analysts said in a note.

The latest batch of sanctions covered ships linked to 1.5 million barrels per day of seaborne Russian crude oil activity on average in 2024, the bank estimated. This consisted of 750,000 bpd of exports to China and 350,000 bpd to India.

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