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Informist, Friday, Aug 22, 2025

MUMBAI - The movement in global crude oil prices are likely to provide cues for domestic oil companies next week, particularly in the context of US tariffs. While the robust domestic demand is positive for oil refining stocks in the near term, the muted movement in crude oil prices has been weighing on shares of upstream oil companies, an analyst tracking the oil and gas sector at a domestic brokerage said.

"I see some correction (in oil stocks) in the near term because valuations seem to be expensive," the analyst said. The muted movement in crude oil prices is likely to hit earnings of oil producers such as Oil and Natural Gas Corp., but will help the margins of refiners, he said. The pressure from the US to reduce Russian crude oil is unlikely to have any near-term impact on the sector, as India is not expected to agree to this, the analyst said. 

At 2006 IST, the Brent crude October contract traded on the Intercontinental Exchange was up 0.2% at $67.76 per barrel, sharply lower than the high of around $81 per barrel hit in April.

State-owned refiner Indian Oil Corp. had said on Monday that it will continue to import crude oil from Russia despite the current geopolitical scenario. Russian crude oil imports accounted for 24% of the company's total imports in the June quarter. The Russian oil was imported at a $1.5-per-barrel discount to the benchmark price, Indian Oil's management had said in a post-earnings call with analysts Monday. 

Even though US President Donald Trump had claimed Russia has 'lost' its major oil client India due to fears of secondary tariffs, New Delhi has not yet confirmed whether it has stopped or reduced imports from Russia. Officials at the Russian embassy in India had said Wednesday that India is expected to continue buying crude oil at discounted prices from Russia. Russia's Deputy Trade Commissioner Evgeny Griva said Russia had a "very, very special mechanism" to continue oil supplies to India, Reuters reported. 

About 35% of India's crude oil consumption is met from Russia. The US had imposed an additional 25% tariff on India for continuing to buy crude oil from Russia. President Trump has been putting pressure on countries buying oil from Russia. The deadline for the additional US tariff on India ends next week. Investors will continue to look for further updates about diplomatic talks between India and other countries for trade agreements. 

TOP HEADLINES
* US natural gas stocks rise 13 bcf in week ended Aug 15, says EIA
* PRESS: Russia expects India to keep buying crude oil at discounted prices
* Indian Oil signs pact with Air India for sustainable aviation fuel supply
* ONGC, Engineers India sign pact for helium recovery project in Tamil Nadu
* Analyst Concall:IOC says to continue Russian oil import at $1.5/bbl discount
* Oil cos achieve 19.1% ethanol blending in Nov-Jul, 19.9% in Jul
* PRESS: Russia 'lost' oil client India on fear over secondary tariffs  Trump
* Earnings Review: IOC PAT doubles YoY on low oil prices, still misses view

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

US$1 = INR 87.53

Reported by Anjana Therese Antony
Edited by Saji George Titus

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