India adds a twist in the tale as oil stock prices adjust to Saudi shock

Mumbai: The drone attacks on Saudi Arabia’s oil infrastructure, which hit 5-6% of global oil supplies, have expectedly resulted in soaring oil prices. Brent crude futures were up 10.8% at $66.7/barrel at the time of writing.

Investors in Oil and Natural Gas Corp. Ltd (ONGC) and Oil India Ltd should have been counting their petrodollars. After all, every $1 increase in Brent crude prices results in a 2.5-2.9% increase in annualised earnings per share for these companies, according to calculations by Jefferies India Pvt. Ltd. Monday’s $6.5 rally in crude prices should, by that estimate, result in a 16-19% boost to their earnings.