Shares of Oil and Natural Gas Corporation (ONGC) and Oil India surged as much as 10 percent on January 28, tracking a fresh uptick in global crude prices after severe weather conditions in the United States disrupted production and exports, tightening near-term supply in the global market.

At around 11 am, Brent crude futures were trading higher at $67.90 per barrel, while WTI crude gained to $62.81 per barrel. The move followed estimates from analysts that US producers may have lost nearly 2 million barrels per day of output over the weekend as a winter storm strained energy infrastructure, disrupted power grids, and forced temporary shutdowns across key production and export hubs.

Adding to supply concerns, crude and LNG exports from US Gulf Coast ports reportedly fell to zero on Sunday, according to ship tracking data cited by Reuters. Parallelly, reports of production disruptions in Kazakhstan and rising geopolitical tensions between the US and Iran added another layer of support to oil prices.

This external supply shock quickly transmitted into Indian markets, where upstream exploration and production companies typically react positively to any firming in crude benchmarks.

ONGC shares rose over 7 percent to hit a fresh 52-week high of Rs 266.2, while Oil India rallied nearly 10 percent to a new high of Rs 492.

While the immediate trigger for the rally was global oil movement, ONGC also had a company-specific development that supported sentiment. The company recently announced the signing of shipbuilding contracts with South Korea’s Samsung Heavy Industries for two Very Large Ethane Carriers (VLECs). These vessels will be owned through joint ventures between ONGC and MOL Japan—Bharat Ethane One IFSC Pvt. Ltd. and Bharat Ethane Two IFSC Pvt. Ltd.—set up in GIFT City, Gujarat.

The vessels are intended to transport nearly 600 KTPA of ethane for OPaL, ONGC’s petrochemical subsidiary. Each carrier will be Indian-flagged and have a cargo capacity of one lakh cubic meters. While not directly linked to crude price movements, this announcement reinforced ONGC’s downstream integration and long-term feedstock logistics strategy, which added to positive momentum in the stock.

Oil India, being a pure upstream play with high sensitivity to crude realizations, reacted even more sharply to the price move.

The current crude rally is largely being interpreted by global analysts as supply-led and temporary. Analysts quoted in international reports noted that once weather-related disruptions ease and supply normalises, pressure on oil prices could re-emerge. There are also expectations of a global crude surplus in the current year, which may cap prices around the $60 per barrel zone for WTI despite geopolitical noise.

However, for upstream producers like ONGC and Oil India, even short-lived spikes in crude prices tend to improve near-term earnings visibility, particularly if benchmark realizations hold above recent averages.

India imports the majority of its crude oil requirements, making rising oil prices structurally negative for the broader economy through higher import bills and potential inflationary pressure. However, for upstream PSUs, the equation works differently.

Higher crude prices translate into better realizations for domestically produced oil, improving profitability, cash flows, and dividend capacity. This divergence often leads to upstream stocks rallying even when the broader market remains cautious about oil-driven macro risks.