Tariff Tensions Hit Indian Oil Stocks — Investors Should Watch Closely

Oil Stocks Slip On Tariff Tension: Is It Time To Refuel Or Retreat?

Energy stocks took a hit on Tuesday after U.S. President Donald Trump threatened steep tariffs on Indian imports of Russian oil. The market reacted swiftly and sharply.

HPCL tumbled 3.47%, BPCL sank 2.53%, and IOC dropped 2.13%. Other players weren’t spared — Oil India slipped 2.05%, Mahanagar Gas lost 2.71%, and Reliance Industries shed 1.18%. The Nifty Oil & Gas index declined by 1.3%.

Traders are asking: Is this just market noise or the start of something more serious? With global energy politics heating up, investors are advised to tread carefully.

Will India buckle under pressure or continue buying discounted Russian barrels? Should investors hold, sell, or wait for a better entry point? The oil war is heating up.

Tariff Trump Strikes Again: India’s Oil Sector Faces New Challenges

Prepare for turbulence as former President Trump targets India’s oil imports with fresh tariff threats. The recent sell-off in Indian oil and gas stocks followed Trump’s announcement to “substantially raise” tariffs on Indian exports. He accuses New Delhi of purchasing discounted Russian crude and allegedly reselling it globally, though details remain unclear.

Earlier, Trump imposed a 25% tariff on Indian goods starting August 1, citing high trade barriers and India’s continued defense and energy ties with Russia. His criticism centers on India’s imports from Russia, which he claims support Moscow’s war efforts in Ukraine.

Markets dislike uncertainty, and Trump’s trade rhetoric is stirring volatility. The question remains: Is this a calculated political move or the start of a prolonged trade conflict? Investors are watching closely.

Impact of Russian Crude Import Halt on Indian Oil Marketing Companies (OMCs)

• Russian crude accounts for 30–40% of India’s oil imports and is priced $3–4 per barrel cheaper.
• Halting Russian imports could reduce gross refining margins (GRMs) by $1–1.5 per barrel.
• Expected FY26 EBITDA decline:
• • 8–10% for OMCs
  • 20–25% for MRPL and CPCL
  • 2% for Reliance Industries
• A potential rise in diesel cracks due to global supply concerns may partially offset earnings pressure.
• OMCs’ marketing margins are highly sensitive to crude price fluctuations.
• Breakeven marketing margin of ₹3.5 per litre is achievable at ~$75 per barrel Brent crude.
• Every $1 increase in crude price reduces auto fuel gross marketing margin (GMM) by ₹0.5 per litre.
• A $1 rise in crude price lowers consolidated EBITDA by 7–10%

Also Read: Russia Slams Trump’s Tariffs As “Neocolonial Agenda” — How US-Russia Relations Have Shifted In 2025