HPCL, BPCL, IOC rally as West eases sanctions on Iran

MUMBAI: Shares of oil marketing companies surged higher in trade following correction in crude oil prices after Iran signed a nuclear deal with the Western countries.

According to the deal signed in Geneva, Iran will get over $4 billion from frozen accounts and restrictions on trade in gold, petrochemicals, car and plane parts will be suspended. In return, Iran will restrict its nuclear activities.

“Iran has been one of the key suppliers of crude to India. However, in the last few years the amount of oil we import from Iran has slipped because of the sanctions,” said Saurabh Mukherjea, CEO-Institutional Equities, Ambit Capital in an interview to ET Now.

“With this deal, my reckoning is, our oil imports from Iran will shoot up once again. Iran is one of the few countries where we do not have to pay in US dollars for the oil. Not only does it mean that the overall global oil prices will soften but this can also offer us relief on the balance of payment side. So the fact that overall oil prices come off and some BoP relief should mean positive news for the stock market,” he added

Crude oil prices eased after the sanctions on Iran were lifted. The crude oil prices were down $1.02 per barrel to $93.82 and brent crude oil prices were down $2.51 at $108.54 per dollar.

The rupee appreciated against the US dollar after the quantitative easing concerns were eased. The partially convertible rupee was at 62.53 per dollar, up 34 paise, against previous close of 62.87 in previous trade.

The officials of oil marketing companies are of the view that removal of restrictions on shipping cover will enable them to purchase contracted volumes more easily.

At 11:45 a.m.; IOC was up 3.19 per cent, HCPL rallied 6.42 per cent and BPCL moved up 4.82 per cent.