ONGC shares jump over 4%, extend gains for second session. What’s triggering this rally?

Shares of upstream oil producer ONGC rallied as much as 4.5% to an intraday high of Rs 299 on the BSE on Tuesday, extending gains for a second straight session. The surge in the stock came as crude oil prices moved higher again, nearing the $110 per barrel mark.

The rise in oil prices follows fading hopes of an end to the U.S.-Iran war, while the Strait of Hormuz remained largely shut, disrupting energy supplies from the key Middle East producing region to global markets.

Higher crude prices are generally positive for upstream oil and gas companies such as ONGC and Oil India, as they directly improve revenue per barrel, support profit margins and can encourage higher exploration spending. In contrast, lower crude prices tend to benefit downstream refiners and fuel retailers such as HPCL, BPCL and IOCL, as input costs decline.


Expectations of renewed diplomatic progress weakened over the weekend after Trump cancelled a planned Islamabad visit by his envoys Steve Witkoff and Jared Kushner. This happened even as Iranian Foreign Minister Abbas Araqchi arrived in Pakistan.

Trump’s rejection of the Iranian proposal has left the conflict at a standstill, with Iran restricting shipping through the Strait of Hormuz and the U.S. continuing its blockade of Iranian ports. The waterway normally carries supplies equal to about 20% of global oil and gas consumption.

Where are prices headed?

Goldman Sachs raised its fourth-quarter oil price forecasts to $90 a barrel for Brent crude and $83 for WTI, citing reduced Middle East output.

“The economic risks are larger than our crude base case alone suggests because of the net upside risks to oil prices, unusually high refined product prices, product shortages risks, and the unprecedented scale of the shock,” Reuters reported, citing Goldman Sachs analysts.

According to a Haitong Futures note cited by Reuters, the current ceasefire phase increasingly appears to be preparation for further conflict. It added that if U.S.-Iran talks fail to make meaningful progress by the end of April and hostilities resume, oil prices could rise to fresh highs for the year.

Macquarie estimates crude prices may remain supported in the $85 to $90 range in the near term, with a gradual move toward $110 as supply conditions improve. It also warned that prolonged disruptions through April could push Brent as high as $150 per barrel.

Nuvama Institutional Equities said an extended closure of the Strait of Hormuz, which handles around 20 million barrels per day, could lift crude prices into the $110 to $150 range.

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