Shares of state-run oil exploration companies, Oil and Natural Gas Corporation (ONGC) and Oil India, witnessed a significant drop on Friday, April 4, 2025, following a sharp decline in global crude oil prices. ONGC’s stock fell by 7%, trading at ₹225.25 per share, while Oil India experienced a 6.5% drop, closing at ₹366.1 per share.
The decline in crude oil prices was triggered by a surprise production hike announcement by the Organization of Petroleum Exporting Countries (OPEC+). The group increased output by 4.11 million barrels per day, far exceeding the planned hike of 1.38 million barrels per day. This move, described as a deliberate effort to drive down prices, added to market instability already fueled by fears of a U.S. recession and recent tariff announcements by former President Donald Trump.
The falling crude prices have adversely impacted the profit margins of upstream oil companies like ONGC and Oil India, as their costs remain unchanged while revenue from crude oil sales declines. Analysts note that the price of refined products may not decrease proportionately, leading to potential inventory losses for refineries.
Despite the immediate challenges, industry experts remain optimistic about the long-term prospects of these companies, citing operational improvements and strategic initiatives. Stay tuned for further updates on this developing story.
