Saudi Arabia Crude Oil Price Cut: Saudi Arabia made the biggest cut in 26 years, why is it a big relief for IOC, BPCL and HPCL?

Business Desk – Saudi Arabia Crude Oil Price Cut: Giving a big gift to Asian countries, Saudi Arabia has made the biggest cut in the prices of crude oil in the last 26 years. This decision has been taken at a time when geopolitical tension has reduced in West Asia. There is pressure on prices due to increasing supply of crude oil in the global market. After this announcement, there was a rise in the shares of Indian oil marketing companies Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL).

What did Saudi Arabia announce?

Saudi Arabia has cut the official selling price (OSP) of Arabian Light crude oil sold to Asian customers by $ 1.1 per barrel for August 2026. This cut is considered to be the biggest in the last 26 years. After this decision, Saudi Arabian light crude will now be sold at a premium of $ 1.5 per barrel over the Oman/Dubai regional benchmark, which is much lower than before.

Why is Saudi Arabia important for India?

Saudi Arabia is among the largest crude oil suppliers to India. During January to March 2026, India imported crude oil worth $2.59 billion from Saudi Arabia, which was about 16.03 percent of the country’s total crude oil imports. However, Russia still remains India’s largest oil supplier and during the same period it fulfilled about 50 percent of India’s total crude oil imports.

How will IOC, BPCL and HPCL benefit?

India’s government oil marketing companies IOC, BPCL and HPCL will get the biggest benefit from Saudi Arabia’s reduction in crude oil prices. Crude oil is the biggest raw material for these companies. When crude oil purchases are cheaper, refining costs decrease and companies’ refining margins and fuel marketing margins improve. This increases the possibility of increase in earnings and profits of companies.

What did the brokerage firm say?

According to brokerage house ICICI Securities, at current crude oil prices, oil marketing companies are in a position to maintain retail fuel margins of around Rs 8 to 10 per litre. The brokerage believes that if the current conditions in the international market continue, then companies like IOC, BPCL and HPCL may see significant improvement in earnings and profits in the next 12 months.

Why did crude oil prices fall?

According to experts, in recent times, due to reducing geopolitical tension in West Asia and increase in global oil production, there has been pressure on crude oil prices in the international market. For this reason, Saudi Arabia has decided to make a big cut in the official selling prices to strengthen its competitive position in the Asian market.

What was the impact on the Indian stock market?

After Saudi Arabia’s announcement, investors considered it positive for Indian oil marketing companies. For this reason, buying was seen in the shares of Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL). Investors hope that due to cheap crude oil, the costs of these companies will reduce and their financial performance may improve in the coming quarters.

What will be the impact on common people?

The fall in international prices of crude oil may also benefit the prices of petrol and diesel in future. However, changes in retail fuel prices also depend on many other factors, such as government taxes, marketing strategies of companies and global market conditions. In such a situation, crude oil becoming cheaper does not mean that the prices of petrol and diesel will reduce immediately, but the cost of oil marketing companies will definitely reduce.