Oil Stocks Outlook
Seen bullish on US-Iran peace deal hope, low crude price
This story was originally published at 21:04 IST on 12 June 2026
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MUMBAI – The stocks in the Nifty Oil & Gas index are expected to trade higher next week amid signs of the US-Iran war coming to an end. The August futures of Brent Crude Oil fell sharply after US President Donald Trump's announcement that Tehran's top leadership had approved a peace pact. "The Naval Blockade will remain in full force and effect until this Transaction is finalized – Time and place of the signing to be announced shortly," Trump said on the social media platform Truth Social.
On Friday, Nifty Oil & Gas index closed over 2% higher at 11012.30 points. Only three constituents in the 15-stock index ended lower. Chennai Petroleum Corp. ended marginally lower. Upstream oil majors – Oil India and Oil and Natural Gas Corp. ended nearly 3% lower each. Meanwhile, oil marketing companies – Indian Oil Corp., Bharat Petroleum Corp, and Hindustan Petroleum Corp. closed 5–6% higher as global crude oil prices fell.
The US and Iran may sign a peace deal as soon as Sunday, with Washington agreeing to lift oil sanctions and Tehran promising to reopen the strategically vital waterway – the Strait of Hormuz within 30 days, CNBC reported, citing an Iranian Media. At 1614 IST, the August Futures of Brent crude oil traded over 3% lower at $87.33 per barrel. Crude oil fell over 10% from the previous day high to Friday's low of $85.80 per barrel.
"The Nifty Oil & Gas index has formed a Morning Star candlestick pattern near it's price support of 10,600 level, signalling a bullish reversal," said Vipin Kumaar, senior technical and derivatives analyst at Globe Capital Market. Kumaar estimates the support for the sectoral index at 10600 points, while the resistance at around 11500-11750 points.
Oil explorers ended the week on a negative note after the government implemented a 16.66% effective royalty on crude oil produced from nomination on-land fields. The government hiked the royalty rate to 20% from 12.5% earlier and the tax for these blocks will be calculated on a cum-royalty basis. This move is likely to weigh on the earnings of oil explorers due to heavy tax burden.
Brokerages see Oil India suffering from the royalty revision, as it produces a large volume of its oil from onshore blocks. The effective royalty rates on crude oil sales will increase to around $13 per barrel from $10 per barrel in 2026-27 (Apr-Mar), said Kotak Securities. This is expected to impact the company's earnings before interest, tax, depreciation, and amortisation by 4-5%, and earnings per share by 5-6%, the brokerage said.
The royalty on crude sales of Oil Natural Gas Corp. is seen to increase to around $8.6 per barrel from $7.7 per barrel, according to Kotak Securities. This is estimated to impact the state-owned company's standalone earnings before interest, taxes, depreciation, and amortisation by around 1% and earnings per share by around 1%, Kotak Securities added. Both these stocks ended nearly 3% lower on Wednesday, and both hit a three-month low as well.
TOP HEADLINES
* Govt bans commercial buyers from buying petrol, diesel at retail outlets
* OPEC cuts 2026 global crude oil demand growth view by 0.2 mln bpd to 1.0 mln
* Oil India signs collaboration framework with Canada's non-profit energy co
* EU moots sanctions against 50 cos, including India's, for trade with Russia
* Brent crude prices to average $105 per barrel Jun-Jul, $89 in Oct-Dec - EIA
* Brent crude to average $87 per barrel in 2026, says Fitch Ratings
* BPCL says May petrol sales rose 2.5% YoY in Delhi, diesel 2.9%
* IOC ups domestic LPG prices across metro cities by INR 29/cylinder
Following are the resistance and support levels for key oil stocks for next week as per calculations based on their prices on the National Stock Exchange:
| Company | Price | Week-on-week change in % | Resistance | Support |
| Bharat Petroleum Corp | 302.35 | 2.50 | 310.80 | 288.30 |
| Hindustan Petroleum Corp | 388.90 | 1.00 | 403.10 | 364.90 |
| Indian Oil Corp | 140.94 | 1.90 | 144.40 | 135.00 |
| Oil & Natural Gas Corp | 246.20 | (-)7.00 | 254.30 | 239.30 |
| Oil India | 417.80 | (-)13.60 | 432.20 | 407.30 |
| Reliance Industries | 1293.00 | 0.20 | 1318.70 | 1249.70 |
| Index | Levels | |||
| NIFTY OIL & GAS | 11012.30 | (-)0.90 | 11195.00 | 10700.50 |
| Nifty 50 | 23622.90 | 1.10 | 23858.80 | 23195.90 |
| S&P BSE Sensex | 75527.95 | 1.70 | 76351.10 | 74041.80 |
End
US$1 = INR 95.11
Reported by Adhithya Aji
Edited by Deephsikha Bhardwaj
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