Oil India shares up by more than 1% today as risk of global oil supply disruption increases

Oil India shares are gaining today. At 11:56 a.m. IST, 9^th January, its shares are up by 1.73%, trading at Rs 417.05. Nifty 50 index is down by 0.53% at this time.

Risk of global crude oil supply disruption has increased

Oil India shares are gaining today after risks of global oil supply disruption suddenly increased. Protests against the economic situation in Iran have entered the 13^th day. This has increased the risk of disruption in oil supply from Iran.

Iraq’s government to nationalize West Qurna 2 oil field

Iraq’s cabinet has approved the nationalization of West Qurna 2 oil field. Russia’s Lukoil is a stakeholder in this oil field. US has imposed sanctions on Lukoil. Now the West Qurna 2 oilfield is being nationalized so that it does not come under the ambit of US sanctions on Lukoil.

To increase uncertainty further, an oil tanker heading for Russia was hit by a drone attack in Black Sea, yesterday.

US Senator Lindsay Graham has brought a bill that gives the US President power to increase tariffs to up to 500% on countries that continue to buy oil from Russia. US President Donald Trump has endorsed this bill. This means that supply of Russia oil may completely dry up until Russia agrees to a ceasefire with Ukraine.

Crude oil prices up at this time

WTI crude for February delivery is up, trading at $58.26 per barrel at this time. Brent Crude is up, trading at $62.53 per barrel. Oil India is mainly an oil & gas production company. It benefits from increase in crude oil prices. Oil India operates a number of oil & gas fields in India. Oil India also has stakes in oil fields in Russia, Venezuela, Nigeria, Mozambique , Libya, Bangladesh and Gabon.

In the past 1 year, Oil India shares have lost 10.70%. Nifty 50 index gained 9.41% in this period.

Disclaimer : This content is only for informational purpose. It does not make any recommendation to act or invest.

Source: NSE, Oil India