Oil stocks in deep green amid Red Sea crisis. ONGC shares jump 8%

Oil stocks jumped up to 8% on Monday led by gains in state-run Oil & Natural Gas Corporation (ONGC) and market heavyweight Reliance Industries (RIL) on fuel supply concerns in the aftermath of a missile attack on a Trafigura-operated fuel tanker in the Red Sea.

ONGC shares hit their 52-week high of Rs 253.20 on the NSE. Castrol India was the next top gainer with over 6% surge followed by RIL (5%) which had the maximum impact not just on the headline indices Nifty and S&P BSE Sensex but also on the Nifty Oil & Gas index.

The 15-share index was up 4% and trading at 398.55 around 12:45 pm and 14 stocks were trading in the green. The laggard was Aegis Logistics which was down 2%.

Among the oil marketing companies, Hindustan Petroleum Corporation (HPCL) surged over 4% while Bharat Petroleum Corporation (BPCL) shares gained more than 3% to hit a fresh 52-week high of Rs 489.95. Indian Oil Corporation (IOC) was up by over 2% around this time.

The impact of the ongoing crisis around the Red Sea shipping route, which accounted for 50% of the country’s exports and 30% of imports last fiscal, will vary depending on the industry, a PTI report said quoting a report.

Commodities trader Trafigura said on Saturday it was assessing the security risks of further Red Sea voyages after firefighters put out a blaze on a tanker attacked by Yemen’s Houthi group a day earlier.
“Disruptions to supply have been limited, but that changed on Friday after an oil tanker operating on behalf of Trafigura was hit by a missile off the coast of Yemen,” a Reuters report said quoting ANZ analysts.”With oil tankers linked to the US and UK now under threat of attack, the market is likely to reprice the risk of disruptions,” the report said, quoting analysts.

Following the attack, Brent crude price jumped 1.3% and shot above the $84/BBl mark.

Read More: Sensex jumps over 1,000 points: Key factors behind the market rally

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