Hormuz crisis lifts ONGC oil business

According to the Economic Times, the ongoing crisis in the Strait of Hormuz is creating significant operational challenges for the Oil and Natural Gas Corporation (ONGC). A senior official stated that while higher global oil prices have provided a boost to the company's exploration business, its petrochemical unit is facing severe headwinds due to surging feedstock costs and supply chain interruptions.

The company's Dahej petrochemical complex, which relies heavily on natural gas and naphtha, has been particularly affected. The official noted that naphtha prices have nearly doubled, rising from approximately $600 to over $1,100 per unit. Furthermore, the facility has experienced a complete halt in gaseous feed supplies, leaving the plant unable to maintain normal operations. The official indicated that the company is waiting for supply lines to stabilize before normalization can occur.

Financial performance has already begun to reflect these pressures. ONGC Petro additions Ltd (OPaL) reported a negative EBITDA of Rs 57 crore for the June quarter of FY27, a sharp decline from previous positive earnings. The company continues to monitor the situation in the Gulf closely, as the volatility of international energy markets remains a primary factor in its current fiscal outlook.