By Admin 
Share Crash: The effect of increasing tension between America, Iran and Israel was such that the prices of crude oil in the international markets have increased by 10 percent. Amid this surge in crude oil prices, shares of downstream oil companies in India like Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL), and Indian Oil Corporation Limited (IOC) collapsed. Their shares fell by 6 percent in early trading. Among these, BPCL shares fell by 6 percent, HPCL shares fell by 5.3 percent and IOC shares fell by 5 percent.
Rise in shares of upstream oil companies
Meanwhile, shares of upstream oil companies saw a rise. On Monday, shares of ONGC, Oil India increased by 5 percent. ONGC shares rose 5 per cent to the day’s highest level of Rs 293 on BSE, while Oil India shares rose 4.5 per cent to Rs 505.50 in early trade. It is clear from this that rising prices of crude oil is a good thing for upstream oil and gas companies.
On the basis of their work, companies in the oil and gas sector are divided into three parts: upstream, downstream and midstream.
Upstream Company- To find and extract sources of crude oil and natural gas under the ground or under the sea.
Downstream Company- Their job is to make crude oil usable by refining it and selling it to customers.
Midstream Company- The work of the companies falling in this category is to transport and store oil and gas from one place to another through pipelines or tankers.
Why are shares of upstream companies rising?
Upstream companies like ONGC or GAIL extract crude oil and sell it at the international market price. For example, today Brent crude crossed $ 82 per barrel. That means these companies are getting more money on the oil they extract.
Why did downstream shares fall?
Even if the price of crude oil increases in the international markets, efforts are made to keep the prices of petrol and diesel stable in the country. In such a situation, downstream companies are buying oil from upstream companies at higher prices, but they are not getting much profit on the sale. Due to this they are incurring losses and its impact is clearly visible on the shares.
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