Oil & Gas Stocks Rally Today; Reliance, ONGC, IOCL Lead; Impact Of Strait Of Hormuz On OMCs & Natural Gas Cos

Oil and gas stocks in India rallied on March 5, 2026, as China reportedly has announced to halt exports of diesel and gasoline due to crisis in Middle East. Heavyweight stocks like Reliance Industries, ONGC, Indian Oil and Oil India emerged as top gainers. The performance comes despite the shutdown of Strait of Hormuz which is likely to impact energy market. Oil market companies and natural gas companies of India are vulnerable to the Hormuz closure.

Oil & Gas Stocks On March 5, 2026:

Nifty Oil & Gas surged by 205.10 points or 1.8% to trade at 11,836. This is near its intraday high of 11,901.15. Despite this, the Nifty Oil & Gas index is down by 2.6% in a month due to Middle East geopolitical crisis. Majority of stocks have traded under pressure before picking up momentum on March 5.

Reliance Industries Share Price:

At the time of writing, RIL stock traded at Rs 1,384.20 apiece, up by 2.91%. This makes Reliance the top gainer of the index and also biggest contributor in the broader market rally.

ONGC, Indian Oil & Oil India Share Price:

The largest producers of oil and gas also surged. These included ONGC as the second best performing stock in the index on March 5, with 2.80% upside. While IOCL and OIL India are up by 1.3% and 1.4% respectively.

China Halts Diesel & Gasoline Exports:

The performance comes after a Bloomberg report said that officials from the National Development and Reform Commission, China's top economic planning body, reportedly met refinery executives and verbally directed them to temporarily halt refined fuel exports with immediate effect. These refiners were also asked to stop signing new export contracts and negotiate the cancellation of previously agreed shipments.

The decision comes after the escalation of war in Middle East which has disrupted the transition of global oil and gas through world's leading chokepoint, Strait of Hormuz.

PetroChina, Sinopec, CNOOC, Sinochem Group and private refiner Zhejiang Petrochemical are some of the largest refiners of China.

Due to Strait of Hormuz, crude oil prices have continued to rise. Brent crude and US WTI are up by 4% to 5% to trade around $85 per barrel and $78 per barrel respectively.

How Does Strait of Hormuz Shutdown Impacts India?

The Islamic Revolutionary Guard Corps (IRGC) has announced the closure of the Strait of Hormuz (SoH), warning that any vessel attempting to transit the waterway would be targeted.

"This is a material global risk event. Approximately 20 million barrels per day (mb/d) of crude oil and ~86 million tonnes per annum (mtpa) of LNG pass through the SoH, representing ~27% of global oil trade and ~20% of global LNG trade," Sumit Pokharna, VP Fundamental Research, Kotak Securities.

While a prolonged shutdown appears unlikely, Pokharna added that "even a disruption lasting a few weeks could cause significant market dislocation. Early signs of stress are already visible. Qatar, one of the world's largest LNG exporters, has reportedly shut its LNG plants, exacerbating concerns over supply continuity."

India is vulnerable to the disruption at Hormuz. It has an estimated 50-55% of its crude oil and LNG imports transiting the chokepoint. Meanwhile, strategic petroleum reserves cover only ~8-9 days of oil demand, and there are no comparable strategic reserves for natural gas.

If the disruption persists beyond the very short term, supply-side stress will intensify rapidly. Pokharna added, "We expect gas supplies to be rationed in the near term."

Which Oil & Gas Stocks To Buy?

BUY ONGC & Oil India

According to JM Financial report, ONGC and Oil India will be the key beneficiaries if Brent sustains above $70 per barrel, since every $1/bbl rise in oil price boosts their earnings by 1.5-2% each.

Further, it added, "At CMP, ONGC and Oil India are discounting ~$68-70/bbl net crude realisation assuming 7-7.5x FY28E P/E for the standalone E&P business. We have a BUY each on Oil India (TP unchanged at Rs 560) and ONGC (TP unchanged at Rs 320) based on our Brent crude price assumption of $70/bbl and likely oil and gas output growth over the next two-three years."

BUY Reliance Industries Stock:

"We believe the recent correction in RIL's share price is overdone (4% this week and 8% in the last 1 month after rise in Middle East tensions) as it won't be negatively impacted by the recent spike in crude and LNG prices."

Instead, the analysts believe that RIL could see near-term benefits due to: a) jump in diesel crack on account of supply disruption risk; and b) likely rise in petchem margin (as petchem product prices are likely to rise along with crude price while its feedstock cost is unlikely to rise much as it has limited dependency on crude-linked naphtha).

Hence, they recommended BUY with target price of Rs 1,730.

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