Israel-Iran War: Impact on Indian oil companies like ONGC, Oil India amid rising tensions

India maintains trade relations with both Iran and Israel. Last year, trade with the two countries amounted to approximately Rs 1.1 lakh crore. Trade with Iran was valued at Rs 20,800 crore, primarily involving exports of goods like tea, coffee, basmati rice, and sugar.

Following Iran's attack and Israel's subsequent threats, tensions have escalated throughout the Middle East, leading to global repercussions. Anxiety is rising, stock markets are fluctuating, inflation concerns are mounting, and several Indian companies may suffer losses. However, some companies could benefit from this conflict, as many Indian businesses have ties to Iran and Israel, which could be affected by the war.

India maintains trade relations with both Iran and Israel. Last year, trade with the two countries amounted to approximately Rs 1.1 lakh crore. Trade with Iran was valued at Rs 20,800 crore, primarily involving exports of goods like tea, coffee, basmati rice, and sugar. During the same period, trade with Israel reached Rs 89,000 crore. Major Indian companies such as TCS, Infosys, Adani Ports, Sun Pharma, Lupin, SBI, Wipro, Tech Mahindra, NMDC, Kalyan Jewellers, Titan, and L&T have significant business interests in Israel.

Should the conflict between the two countries escalate, many companies could face substantial losses. Amidst this tension, crude oil prices have strengthened, with Brent crude reaching around $90 per barrel and WTI at $85 per barrel in the global market. This war could also increase the demand for basmati rice from Arab countries, potentially benefiting some companies.

Companies Benefiting from the Iran-Israel War

1. ONGC:

The government-owned ONGC Videsh Limited could profit from rising crude oil prices, impacting its business and potentially leading to increased profits and revenue.

2. Oil India:

Public Sector Undertaking (PSU) Oil India Limited (OIL) is a prominent name in the oil exploration and production industry. Rising crude oil prices could boost the company’s earnings and enhance its margins.

3. Indraprastha Gas Limited:

Indraprastha Gas Limited, a leading gas distributor, could benefit from increasing crude oil prices. As petrol and diesel prices rise, more consumers might switch to CNG, positively impacting the company.

4. Engineers India:

Engineers India, a leader in the civil engineering industry, constructs pumping and compressor stations for crude oil, petroleum products, and slurry, among other projects. If crude oil prices rise, the company could benefit indirectly.