Any further escalation in the Middle East crisis or a sharp jump in crude oil prices could seriously affect the profits of Indian oil and gas companies—particularly Oil Marketing Companies (OMCs) and gas utility firms.
Mixed Impact on Indian Energy Companies
Currently, Indian OMCs and gas companies are experiencing mixed effects due to the unpredictable changes in global crude oil prices.
According to a report by ICICI Securities, crude oil is now trading at around $73 to $74 per barrel. At this level, the earnings of OMCs have already taken a noticeable hit, while upstream oil companies could benefit.
The report clearly mentioned, “We estimate a material impact on OMC earnings and upside risk to upstream earnings even with crude at USD 73-74/bbl as is the case now.”
Future Crude Spikes May Hurt More Than Help
The report further warned that if crude prices go higher, upstream companies may not gain much more. However, such a spike could make things worse for OMCs and gas utility companies.
This is because liquefied natural gas (LNG) prices, which are closely tied to crude, would also rise. That would push up input costs for gas providers, making operations more expensive.
Analysts Taking a Wait-and-Watch Approach
Despite recent price movements, analysts have not yet changed their earnings forecasts or outlooks for the sector. They plan to closely monitor the crude oil markets in the coming weeks before making any firm decisions.
The report also pointed out that the current increase in crude prices is still lower than the average levels seen in the financial year FY25 and significantly below the four-year average.
Impact on Profitability Still Under Control
Therefore, for now, the overall impact on the profit margins of Indian oil and gas companies does not appear alarming.
Geopolitical Risks Add to Market Worries
However, sharp changes in the stock prices of energy firms indicate that investors are worried. One of the main concerns is that the Middle East conflict could disrupt oil and gas shipments via the Strait of Hormuz, a key route for global energy supply.
There is also some fear, although unlikely, that NATO might get involved in the conflict—especially if Iran attacks Western military bases in the region.
Brent Crude Price Still Above Estimates
At present, Brent crude is priced at around $75 per barrel. This is $6–$7 higher than the projected average of $68 for FY26, which could hurt OMCs’ earnings per share (EPS). On the other hand, upstream companies may see a boost.
Even so, current crude prices are still $9 lower than the FY22–25 average and $4 below the FY25 average. This suggests that global supply is sufficient, and concerns over weak demand still weigh on prices.
Conclusion: Risks Remain If Prices Rise Further
In conclusion, ICICI Securities maintained its existing estimates for now. However, it warned that any further surge in crude prices or escalation in conflict could seriously threaten the earnings of Indian OMCs and gas companies.