As the war between Iran, the US and Israel is going on, the global prices of oil and gas are rising, because Iran produces a large amount of the world’s total consumption of crude oil. Hence, investors are curious about the impact of rising crude oil prices on Indian Stocks.
In today’s blog post, we will give you an overview of the best oil and gas stocks to watch as global prices surge.
Why Global Oil Prices Impact the Indian Oil and Gas Sector
India imports a larger portion of its crude oil and gas from different countries to complete its requirements. Hence, any changes in global crude oil and gas prices can significantly impact the Indian crude oil prices. As in the current scenario, global crude oil prices are rising because of the war between Iran, the USA and Israel and the global crude oil supply chain is disrupted, leading to a rise in crude oil prices globally. This price rise will benefit the companies engaged in exploration, selling and marketing of oil and gas in India.
Best Oil and Gas Stocks to Watch in India
The best oil and gas stocks to watch in India are as follows:
- Reliance Industries Limited
- Oil and Natural Gas Corporation Limited
- Bharat Petroleum Corporation Limited
- GAIL Limited
- Oil India Limited
- Hindustan Petroleum Corporation Limited
- Adani Total Gas Limited
- Petronet LNG Limited
- Chennai Petro Limited
- Mahanagar Gas Limited
| Company | Current Market Price (INR) | Market Capitalisation (in INR crore) | 52-Week High | 52-Week Low |
|---|---|---|---|---|
| Reliance Industries Limited | 1394 | 1886426 | 1612 | 1115 |
| Oil and Natural Gas Corporation Limited | 265 | 333818 | 293 | 205 |
| Bharat Petroleum Corporation Limited | 300 | 130155 | 392 | 260 |
| GAIL Limited | 147 | 96917 | 203 | 144 |
| Oil India Limited | 473 | 76898 | 524 | 322 |
| Hindustan Petroleum Corporation Limited | 346 | 73729 | 508 | 320 |
| Adani Total Gas Limited | 515 | 56640 | 798 | 454 |
| Petronet LNG Limited | 289 | 43290 | 326 | 264 |
| Chennai Petroleum Corporation Limited | 1054 | 15695 | 1103 | 516 |
| Mahanagar Gas Limited | 1013 | 10010 | 1587 | 989 |
Overview of Best Oil and Gas Stocks
1. Reliance Industries Limited
Reliance Industries Limited company was incorporated in 1966 by Dhirubhai Ambani. After the death of Dhirubhai Ambani, his son Mukesh Ambani took over the company. And later expanded the company’s operations into various sectors, such as retail and communication. The company’s headquarters is in Mumbai.
| 1 Year Return (%) | 3 Years Return (%) | 5 Years Return (%) |
|---|---|---|
| 12.58 | 25.63 | 35.9 |
2. Oil and Natural Gas Corporation Limited
This company was founded in 1956 and is one of the largest public sector energy companies in India. It works under the Ministry of Petroleum and Natural Gas. ONGC is primarily engaged in the exploration, production, and distribution of crude oil and natural gas. Its headquarters are situated in New Delhi.
| 1 Year Return (%) | 3 Years Return (%) | 5 Years Return (%) |
|---|---|---|
| 15.21 | 72.89 | 141.96 |
3. Bharat Petroleum Corporation Limited
The company was founded in 1952 as a result of a joint venture between the Indian Government and Burmah Shell. Later, when the government acquired the Burmah Shell, BPCL converted into a fully owned government company. The company is engaged in the marketing and distribution of petroleum and its related products to retail users. The company’s headquarters is situated in Mumbai.
| 1 Year Return (%) | 3 Years Return (%) | 5 Years Return (%) |
|---|---|---|
| 14.66 | 70.66 | 38.87 |
4. GAIL Limited
GAIL Limited company was established in 1984 as a public sector undertaking to develop a natural gas transmission network in India. The company was listed on the Indian Stock Exchange in 1997. The company is expanding its natural gas pipeline network across the country. The company’s headquarters is in New Delhi.
| 1 Year Return (%) | 3 Years Return (%) | 5 Years Return (%) |
|---|---|---|
| (5.9) | 33.76 | 59.81 |
5. Oil India Limited
Oil India Limited company was founded in 1959 and works under the Ministry of Petroleum and Natural Gas. The company mainly operates in the North-East region of India. It became a publicly listed company in 2009. The company has exploration facilities in other countries. Its headquarters are situated in Assam.
| 1 Year Return (%) | 3 Years Return (%) | 5 Years Return (%) |
|---|---|---|
| 25.07 | 176.19 | 448.22 |
6. Hindustan Petroleum Corporation Limited
The company was incorporated in 1974 and was initially known as Esso India, and later, after nationalisation, it was renamed as Hindustan Petroleum Corporation Limited. Later in 2018, it was acquired by ONGC Limited. The company got itself listed on the stock exchange in 1977. The company’s headquarter is situated in Mumbai.
| 1 Year Return (%) | 3 Years Return (%) | 5 Years Return (%) |
|---|---|---|
| 6.38 | 113.97 | 119.48 |
7. Adani Total Gas Limited
Adani Total Gas Limited is one of the leading players in the gas distribution space. The company was incorporated in 2005, and over time, it has expanded its presence in supplying piped natural gas to households, industries, etc. It became a publicly listed company in 2018. The headquarters of the company is situated in Ahmedabad.
| 1 Year Return (%) | 3 Years Return (%) | 5 Years Return (%) |
|---|---|---|
| (14.29) | (42.44) | (30.52) |
8. Petronet LNG Limited
The company was incorporated in 1998 to develop Liquid Natural Gas and distribute it among the citizens of the country. The company was listed on the Indian Stock Exchange in 2004. Over the years, the company has expanded its operations and developed infrastructure to supply LNG. The headquarters of the company is situated in New Delhi.
| 1 Year Return (%) | 3 Years Return (%) | 5 Years Return (%) |
|---|---|---|
| 1.55 | 23.94 | 26.14 |
9. Chennai Petroleum Corporation Limited
Chennai Petroleum Corporation Limited company was incorporated in 1965 and was initially known as Madras Refineries Limited. It was established as a joint venture between the Government of India, AMOCO, and the National Iranian Oil Company. Later in 2001, after the IOCL increased its stake in the company, it was renamed as Chennai Petroleum Corporation Limited. The headquarters of the company is situated in Chennai.
| 1 Year Return (%) | 3 Years Return (%) | 5 Years Return (%) |
|---|---|---|
| 89.72 | 316.26 | 855.34 |
10. Mahanagar Gas Limited
Mahanagar Gas Limited company was established in 1995 as a result of a joint venture between GAIL and BG Group. The objective of the company is to provide a strong network of gas distribution in urban areas and to promote the use of cleaner fuels. It offers CNG along with PNG. The company became a publicly listed company in July 2016. The headquarters of the company is located in Mumbai.
| 1 Year Return (%) | 3 Years Return (%) | 5 Years Return (%) |
|---|---|---|
| (22.72) | 2.96 | (11.57) |
Key Factors to Consider Before Investing in Oil and Gas Stocks
The key factors which one can consider before investing in oil and gas stocks are as follows:
- Global Oil Prices: This is one of the key factors that one should consider before making any investment in oil and gas stocks. The companies engaged in the exploration of oil and gas may see fluctuation in their profit margins.
- Government Regulations: The performance of the oil and gas sector is directly influenced by the government policies and regulations. Different types of subsidies and windfall taxes can significantly impact the company’s performance.
- Financial Performance: The company’s performance is directly linked with their financial performance. Their profit margins, debt levels, cash flows, etc., can impact a company’s performance.
- Demand: The global demand for oil and gas is influenced by economic and industrial activities. A growing economy generally has higher demand, which can help oil and gas companies.
Future Outlook of the Indian Oil and Gas Sector
The future outlook of the Indian oil and gas sector is very strong due to increasing demand for energy. The companies in India engaged in exploration, marketing and distribution of oil and gas are expected to grow in future. Along with this, the government is also subsidising the companies by promoting the usage of natural gas. However, these companies are diversifying into renewable energy but still have strong growth potential in the long run.
Conclusion
On a concluding note, due to the war between Iran, Israel and the USA, the global crude oil prices are rising, and there are various countries, such as India, which are significantly dependent on the import of oil from Arab countries. This will impact the profitability of the Indian companies engaged in the selling and distribution of oil and gas. One can invest in these companies for the medium to long term to earn a profit. But it is advisable to consult your investment advisor before making any investment decision. For more market news and insights, download Pocketful – offering users zero brokerage on delivery trades and an easy to use platform designed for both beginners and experienced investors.
Frequently Asked Questions (FAQs)
Why global rise in prices affecting Indian oil and gas stocks?
India imports a large portion of its crude oil from different countries. And if the global crude oil price rises, it can affect the profit margins of Indian oil and gas stocks.
Which factors should an investor consider before investing in oil and gas stocks?
There are various factors, such as the prices of global crude oil, government policies and regulations, and company profitability.
How to invest in oil and gas stocks?
To invest in crude oil and gas stocks, one must open a demat and trading account. Pocketful offers you an opportunity to invest in oil and gas stocks by opening a lifetime free demat account with zero brokerage on delivery.
How can geopolitical tension impact crude oil prices?
Due to geopolitical tensions, the global supply chain has been disrupted, pushing crude oil prices upward and making crude oil expensive in India.
Name the best Oil and Gas Stocks to purchase due to the Global Oil Price Surge?
The best oil and gas stocks to purchase amid the global oil price surge include Reliance Industries, ONGC, Oil India Limited, IOCL, BPCL, etc.
