Shares of state-run oil producers ONGC and Oil India nosedived on Monday, April 7, as global crude prices slumped to their lowest levels in four years. The sell-off was driven by Saudi Arabia’s aggressive pricing tactics and escalating trade tensions sparked by Donald Trump’s tariff actions.
Brent crude dropped nearly 4% to $63.21 per barrel—its lowest since 2021—while West Texas Intermediate (WTI) slipped below the $60 threshold, settling at $59.79. This marks the first time WTI has dipped under $60 in four years, following an 11% fall in Brent last week amid fears of softening global demand.
On the domestic bourses, ONGC tumbled 9.3% intraday to ₹205, and Oil India sank 9.15% to ₹325 before staging a modest recovery. Year-to-date, ONGC has shed over 10%, while Oil India has plunged more than 23% in 2025.
Why Crude’s Collapse Hurts ONGC and Oil India
As upstream producers, ONGC and Oil India rely heavily on robust crude prices to sustain their margins. A sharp drop in crude erodes revenue per barrel, squeezing profits. Compounding this, if refined product prices lag behind the decline in crude, refiners may also face inventory losses due to cost mismatches.
Analysts highlighted added pressure from Saudi Arabia’s move to cut May Arab Light crude prices to Asia by $2.3 per barrel. Coupled with an unexpected production hike by the OPEC+ alliance, the market now faces looming concerns of a supply glut.
Investor sentiment was further rattled by U.S. President Donald Trump’s sweeping tariffs on imports, including expected retaliatory measures from China. These moves have deepened recession fears and cast doubt on future oil demand.
Market Outlook
While crude appears technically oversold, suggesting a potential short-term rebound, caution prevails. Analysts from global brokerage houses anticipate ongoing volatility, especially if geopolitical risk premiums continue to decline.
Unless crude stabilizes above the $70 mark, experts warn that upstream players like ONGC and Oil India may remain under pressure due to limited pricing leverage and an increasingly saturated market.
