OMCs get a breather from cooling oil prices, but the coast is not all clear

Brent crude has dropped below $80 per barrel from $94 on 10 June and an intraday high of $116.8 in March, offering relief to Indian state-run OMCs (IOC, BPCL, HPCL) whose integrated margins have risen to $15-17 per barrel (about Rs 8.9-10.0 per litre). Petronet LNG and city gas distribution firms are also expected to benefit from lower natural gas prices, while ONGC and Oil India may face earnings erosion. Shares of OMCs have gained 9-11% since 11 June, though risks remain from potential excise duty rollback, demand surge from inventory rebuilding, and uncertainty around the US-Iran peace deal expected to be signed on 19 June.