Yesterday, the International Energy Agency warned that global energy security is under threat following Russia’s invasion of Ukraine. That was enough and brent oil has already soared past $110/barrel.
The OPEC+ will be meeting today and the hope is that they will agree to increase supply from April but that may not help much in the short term. The world is bracing for sanctions to be imposed on Russia and that seems inevitable now. The banks across the world have already pulled back any financing and trades, shipping costs are surging and oil companies like BP, Shell announced their exit from Russia. If US cuts off US imports of Russian oil and gas, global oil prices will only rise further.
These geopolitical factors are affecting the markets currently and oil stocks, especially upstream companies like Oil India are doing well. Figuring among the top five gainers on the BSE, the stock is up 10% at Rs.245 and ONGC is up 4.5% at Rs.168.35.