The BSE Oil & Gas index slipped 0.48%, while the Nifty Oil & Gas index ended 0.57% lower.
Oil and gas stocks witnessed selling pressure on Thursday, with shares of Hindustan Petroleum Corporation Ltd (HPCL), Bharat Petroleum Corporation Ltd (BPCL), and Indian Oil Corporation (IOC) slipping up to 4% amid renewed concerns over U.S. sanctions on Russian oil. The move raised fears of supply disruptions and potential cost pressures for Indian refiners, which have been among the key buyers of discounted Russian crude since 2022.
The sell-off was further triggered after Reliance Industries, the top Indian buyer of Russian oil, announced plans to recalibrate Russian oil imports following U.S. sanctions on crude majors Rosneft PJSC and Lukoil PJSC.
“The U.S. sanctions on Russian oil majors also raised concerns that India may have to curtail purchases of discounted Russian crude and turn to costlier alternatives, potentially straining the import bill and inflation outlook,” said Ponmudi R, CEO of Enrich Money.
Weighed down by the development, shares of state-owned HPCL dropped as much as 4.06% to ₹437 apiece on the BSE, while BPCL fell 2.66% to ₹330. The share price of Indian Oil slipped 2.58% to ₹150.05 apiece on the BSE.
On the other hand, ONGC, Petronet LNG, Oil India, GAIL India, Indraprastha Gas, and Mahanagar Gas climbed up to 3%.
Among others, shares of Reliance Industries, the country’s most valued stock, dropped 1.3% to ₹1,446.70, while Adani Total Gas slipped 0.11% to ₹622.80.
The BSE Oil & Gas index slipped 132.77 points, or 0.48%, to close at 27,505.18, while the Nifty Oil & Gas index declined 66.45 points, or 0.57%, to settle at 11,601.15.
The decline in oil stocks followed a recent surge in crude prices, driven by reports that the U.S. is considering fresh sanctions on Russian energy exports and an unexpected drop in U.S. crude inventories.
In the international market, Brent crude prices gained more than 3% to $63.40 per barrel, and West Texas Intermediate (WTI) rose over 3.5% to $59.30. The late-session rally gained momentum following reports that the U.S. is contemplating broader restrictions on Russian crude and refined product exports.
Market analysts believe the move could tighten global supply ahead of the winter demand season, while higher crude oil prices could dent the margins of oil marketing companies.
Meanwhile, the Indian equity market extended its winning streak to six consecutive sessions, with benchmark indices Sensex and Nifty hitting fresh 52-week highs during the day. The Sensex climbed as much as 864 points to an intraday high of 85,290, while the Nifty 50 surged to 26,104. However, the indices trimmed gains by the close, with the Sensex ending 130 points, or 0.15%, higher at 84,556, and the Nifty settling 23 points up at 25,891.
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