Crude oil prices rise due to West Asia crisis, pressure increases on Indian oil and gas companies
Due to the increasing crisis in West Asia, there is a rise in the prices of crude oil globally. Its effect can also be seen on India. Especially Indian oil marketing and gas companies can face financial pressure.
Upstream companies will get benefit
Currently, companies are facing a mixed situation due to the ongoing instability in crude oil prices. According to a report by ICICI Securities, at present the price of crude oil is 73 to 74 dollars per barrel. Despite this, the income of oil marketing companies (OMCs) is getting affected. At the same time, the income of upstream companies can increase. Upstream companies work in the initial part of the oil and gas industry, which is the process of extracting oil and gas from the ground. This can also have a negative impact on gas companies. LNG is related to crude oil, if the price of crude oil increases, then the price of LNG will also increase.
Weakness in demand dominates
The report said that analysts are keeping an eye on the oil markets. It was also said that this surge in oil prices is still less than the increase in FY 2025. The current surge is well below the average of the last four years. Currently, the price of Brent crude is around $ 75 per barrel. This is about $ 6-7 more than the analysts’ FY 2026 estimate of $ 68. Still, crude oil prices remain $ 9 lower than the average of FY 22-25 and $ 4 lower than the average of FY 25. Lack of demand dominates the market.
Deepening crisis on the Strait of Hormuz
However, there are fluctuations in the shares of energy companies. This reflects the concerns of the market amid global uncertainties. The reason behind this is the deepening crisis on the Strait of Hormuz. The Strait of Hormuz is one of the important sea routes in the world, as it connects the Persian Gulf and the Gulf of Oman. A large part of the world’s oil transportation passes through this route. More than two-thirds of India’s oil imports and nearly half of its liquefied natural gas (LNG) imports pass through the Strait of Hormuz. If there is any disruption in this route, India may have to look for other sources and routes.
