On Monday, shares of ONGC (Oil and Natural Gas Corporation) fell over 16 percent to touch an over 15-year low of Rs 74 apiece after oil prices in the international markets plunged nearly 30 percent.
Decline in oil prices amid falling demand due to coronavirus has been pushing the share price of ONGC in the last two months. On Monday, its market cap fell below the Rs 1 lakh crore mark for the first time since August 2004 to Rs 93,227 crore.
International oil prices plummet
After OPEC's (Organization of the Petroleum Exporting Countries) failure to strike a deal with its allies on production cuts, Saudi Arabia, the de-facto leader of the organisation, slashed its selling prices causing concerns of an all-out price war.
International oil benchmark Brent crude futures plummeted over 27 percent on Monday to $32.93 a barrel while US West Texas Intermediate (WTI) crude fell close to 30 percent to a low of $27.34 per barrel.
On Friday, post the meeting between OPEC and its allies (also known as OPEC+), Russia (an ally) rejected Saudi Arabia's recommendation to make additional production cuts of 1.5 million barrels per day starting 1 April that would extend till the end of the year.
With no conclusion on making additional production cuts, it was decided that the oil-producing countries continue monitoring the situation on demand amid slowing economic activity due to coronavirus threat.
Russian Energy Minister Alexander Novak told reporters that the decision was made "because no consensus has been found of how all the 24 countries should simultaneously react to the current situation."
"So as from April 1, we are starting to work without minding the quotas or reductions which were in place earlier but this does not mean that each country would not monitor and analyse market developments," he added.
On Saturday, Saudi Arabia announced aggressive discounts to its official selling prices for April and according to a Reuters report, the kingdom is preparing to increase its production above the 10 million barrel per day mark from the current 9.6 million level.
"We believe the OPEC and Russia oil price war unequivocally started this weekend when Saudi Arabia aggressively cut the relative price at which it sells its crude by the most in at least 20 years," said Goldman Sachs analyst Damien Courvalin in a note to clients on Sunday.
"The prognosis for the oil market is even more dire than in November 2014, when such a price war last started, as it comes to a head with the significant collapse in oil demand due to the coronavirus," the brokerage added.