Markets are pricing in the risk that oil supply could be disrupted if tensions escalate further or if Iran threatens to block the Strait of Hormuz, through which nearly 20% of global crude exports flow.
Here are a few stocks to watch as crude oil prices soar.
Oil and Natural Gas Corp. Ltd
ONGC is the nation’s largest crude oil producer. When crude oil prices rise, ONGC benefits mainly because it sells its crude at prices linked to global benchmarks.
Higher crude prices increase ONGC’s revenue per barrel while most of its production and exploration costs remain largely fixed, leading to a sharp improvement in operating margins and profits.
This operating leverage means even a moderate rise in crude prices can translate into a disproportionately higher increase in earnings and cash flows.
Stronger cash generation improves ONGC’s ability to fund exploration, develop new fields, and support its overseas investments through ONGC Videsh, which also earns better returns when global oil prices are high.
In Q2 FY26, ONGC recorded an increase in revenue, reaching ₹1,57,911.1 crore, a fall from ₹1,59,331.1 crore in the corresponding period of the previous year.
The net profits of the company were placed at ₹12,275.0 crore vs ₹9,853.6 crore year-on-year.
ONGC’s crude oil production continues to grow on quarter-on-quarter basis. The standalone crude oil production during Q2 FY26 and H1 FY26 were 4.63 million tonnes and 9.31mt, respectively, registering a growth of 1.2% over the corresponding period of FY25.
On the gas production front also, ONGC has been able to arrest the degrowth. The decline, which was 0.35% in Q1 FY26 over Q1 FY25, has been brought down to 0.04% in Q2 FY26 over Q2 FY25.
In a recent conference call, the management has highlighted that they could be achieving 20mt for crude oil in FY26.
And as for gas, it would be slightly below the 21.5 BCM projected.
The company is also targeting a reduction of about ₹5,000 crore in operational expenditure.
Hindustan Petroleum Corp. Ltd (HPCL)
The company operates across the energy value chain—from refining crude oil to selling finished products like petrol, diesel, LPG, and lubricants nationwide.
When crude oil prices rise, HPCL usually faces short-term pressure on profits. Its raw material cost goes up immediately, while selling prices of petrol and diesel may not increase at the same pace, especially if the government keeps fuel prices under control to manage inflation.
This squeezes refining and marketing margins and can also lead to inventory losses.
In Q3 FY26, HPCL recorded an increase in revenue, reaching ₹1,24,582.7 crore, up from ₹1,19,040.5 crore in the corresponding period of the previous year. Net profits rose to ₹3,890.4 crore vs ₹3,008.2 crore on-year.
On the refining side, HPCL is completing major projects like the Barmer refinery and petrochemical complex in Rajasthan and expanding existing facilities like Visakhapatnam and Mumbai.
Oil India Ltd
Oil India is a government-owned upstream oil & gas company engaged in exploration, production, and transportation of crude oil and natural gas.
Being a crude oil producer, Oil India benefits when crude oil prices rise as it earns higher prices for the oil it produces.
In Q2 FY26, Oil India recorded an increase in revenue, reaching ₹9,175.4 crore, up from ₹8,135.9 crore in the corresponding period of the previous year. Net profits were placed at ₹1,440.3 crore vs ₹1,843.2 crore on-year.
On the upstream front, Oil India has strengthened its resource base through the acreage expansion, exploration in the new prospective areas, achieving planned drilling targets, and at par production.
On the downstream side, expansion of Numaligarh Refinery is gathering momentum with the commissioning of select units on track.
Happy investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
