ONGC shares jump 3% as Brent Crude spikes over 12% on Mideast tensions

Brent crude prices rose by $6 to $75.36 per barrel, marking their highest levels in months, driven by a dramatic escalation in geopolitical tensions in the Middle East following Israel’s airstrike on Iran.

The airstrike, which targeted Iran’s nuclear infrastructure and ballistic missile capabilities, has sparked widespread concerns over potential disruptions in global oil supplies.

This news has sent oil prices soaring, with traders pricing in a heightened risk premium amid fears of further conflict in the region, especially concerning the Strait of Hormuz, a vital passage for global oil shipments.

Saul Kavonic, senior energy analyst at MST Marquee, noted that while disruptions to oil supply are not imminent, the geopolitical tensions have significantly raised concerns over Iranian retaliation against oil infrastructure. He added that if the situation escalates further, Iran could potentially disrupt up to 20 million barrels of oil per day, exacerbating volatility in global oil markets.

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The ongoing tensions between Israel and Iran have intensified market fears, with analysts suggesting that the situation may further disrupt oil supplies. As the conflict continues to unfold, the risk premium in the oil market is expected to remain elevated, which could continue to support Brent crude prices at higher levels.Also read: Dixon Technologies shares in focus on JV with Signify to strengthen lighting business in India

ONGC is a potential beneficiary of surging Brent crude prices due to its position as one of India’s largest oil and gas exploration and production companies. As crude prices rise, ONGC’s revenues from its oil production could increase, boosting its profit margins.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)