Oil and Gas Companies to watch in Volatile Market

Oil price swings, geopolitical tensions, and energy transition pressures are the news every other day. However, India’s oil & gas sector is quietly scripting its own growth story. As the third-largest energy consumer globally, Oil and Gas Companies in India are ramping up investments to meet growing domestic demand. India is not just surviving the global chaos; it’s reshaping its energy roadmap. In this article, we examine the investment opportunities in Oil and Gas Companies in India within the broader energy sector.

With demand expected to grow by more than 3.4% in 2025 alone (more than double China’s pace), and significant investments pouring into refining, pipelines, and clean fuel technologies, this sector is emerging as a hotspot for long-term investors. Many portfolio advisory services are betting on traditional giants like HPCL and GAIL- two of the leading Oil and Gas Companies in India – as well as new-age clean energy pivots.

Demand Surge & Strategic Importance

OPEC forecasts that India’s oil demand will rise from 5.55 million barrels/day in 2024 to 5.74 million barrels per day in 2025, a 3.4% increase, nearly double China’s growth rate. It is expected to rise further to ~5.99 million barrels per day (Mbpd) in 2026. S&P Global predicts India will lead global oil demand growth in the coming years, even amid uncertain global GDP trends.

It means that India’s booming economy (projected > 6% annual GDP growth; energy demand growing ~5.5% CAGR) is fueling a surge in both oil and natural gas consumption.

Supply Bottlenecks & Infrastructure Gaps

While India’s oil demand is booming, its energy supply and infrastructure are struggling to keep pace. These gaps present both challenges and opportunities for investors.

Refining Capacity Constraints: India’s total refining capacity stands at around 251 million tonnes per annum (MTPA) (as of 2025), but this has only grown ~5% over the past 7 years, an underachievement compared to the growing demand. According to the Economic Times, India aimed for a 69% increase in refining output, but ground reality shows delayed expansions due to land acquisition, environmental clearances, and funding issues.

Pipeline Infrastructure Gaps: Despite covering vast geography, India still lacks a fully integrated oil & gas pipeline grid. Many high-demand areas still depend on rail or truck transport, which is expensive and inefficient.

The natural gas pipeline network, led by GAIL, covers ~23,000 km but remains patchy, especially in eastern and northeastern India. India’s per capita pipeline penetration is significantly lower than that of its global peers.

Companies involved in pipeline construction and maintenance (like GAIL, GSPL, and private EPC contractors) are key beneficiaries of the National Gas Grid initiative and the upcoming CGD network expansion.

Petrochemical Output Deficiency: India currently converts only ~20% of crude oil into petrochemicals, compared to China’s 50% conversion rate. This leaves India exposed to importing high-value chemicals and polymers, hurting the trade balance.

A massive opportunity lies in the petrochemical upgrade cycle. Leading Oil and Gas Companies in India like, Reliance, IOCL, and BPCL are building or upgrading complex units to produce more ethylene, propylene, and aromatics, which are essential for a wide range of applications, from packaging to pharmaceuticals.

Underinvestment in Exploration (Upstream): India’s exploration intensity remains low: less than 50% of sedimentary basins are under active exploration. High import dependency: ~85% of India’s crude oil needs and 45% of its gas needs are met via imports.

Explore oil companies share price like Oil India, ONGC, and private players like Vedanta are ramping up spending on fields, with policy tailwinds (e.g., tax reliefs, revenue sharing model) making the sector more investor-friendly.

Key Investment Opportunities

Now, if you are looking for the best investment portfolio for July 2025 that has oil and gas companies in India, here are some major segments to watch:

Refining & Petrochemicals: India’s refining sector is under pressure to expand as demand surges. PSU refiners, including IOCL, BPCL, and HPCL, plan to invest $27 billion by 2025 to upgrade and expand their petrochemical capacity. 

With global trends shifting toward higher petrochemical yields, Reliance and others are aiming to convert up to 70% of crude oil into value-added products, such as plastics and chemicals. This shift promises higher margins and reduced Reliance on imports, offering strong investment potential in refinery modernization and chemical integration.

City Gas Distribution (CGD): India’s CGD segment is expanding fast, aiming to cover 70% of the population by 2030. Companies like MGL, IGL, Adani Total Gas, and GAIL Gas are gaining from rising urban demand for PNG and CNG. 

With strong ROEs (~17%), steady cash flows, and government support, these stocks are seen as stable, long-term bets. As more cities shift to cleaner fuels, CGD players are well-placed to capture growth while staying relatively insulated from crude price volatility.

Renewable-Linked Refining Assets: Oil & Gas Companies in India are investing in green fuel technologies to stay future-ready. IOCL’s Panipat refinery is adding capacity to produce 30,000 TPA of SAF and 10,000 TPA green hydrogen by 2027. India also targets 5 million tonnes/year of green hydrogen by 2030. 

These projects align with global ESG trends and could unlock new revenue streams. Investors seeking long-term exposure to clean energy can track refiners that integrate renewable energy sources into their operations.

Natural Gas Expansion: Natural gas is a key focus in India’s clean energy shift, with plans to raise its share from 6% to 15% by 2030. Companies like GAIL, ONGC, and Oil India are expanding their pipelines, LNG terminals, and production facilities. The recent 15-year gas deal between Oil India and GAIL highlights growing confidence in domestic supply. As demand grows in industries, transport, and cities, natural gas infrastructure offers solid long-term opportunities.

Challenges & Risks

Although the industry appears promising, it also presents its own set of challenges. Here are some of the associated risks:

• Refining delays: Slow capacity expansion limits India’s ability to meet growing demand and capitalize on export opportunities.
• Policy volatility: Frequent changes in fuel pricing, subsidies, and tax policies can impact profitability and investor confidence.
• High capital expenditure (capex) costs: Projects such as refineries, pipelines, and hydrogen plants require substantial upfront investment with long payback periods.
• Global price shocks: Volatile crude oil prices (such as Brent, which swings between $70 and $90) can disrupt margins and affect earnings visibility.

Few Popular Oil & Gas Stocks

How to Position a Portfolio?

Here are a few themes investors can consider for their portfolio:

• Core picks: CGD firms, such as MGL, GAIL, and HPCL, offer stable income backed by policy support.
• Growth drivers: They include green hydrogen, SAF-linked refineries (Panipat), and petrochemical expansions (Reliance, BPCL).
• Diversification: Consider upstream/DSF plays and strategic LPG/pipeline firms in Gujarat and UP.

If you are still confused, you can take help from Jarvis Invest for portfolio creation.

Conclusion

Despite global volatility, Oil and Gas Companies in India remains investor-friendly, thanks to dynamic demand, strategic sourcing, and bold policy reforms. Refining capacity upgrades, petrochemical diversification, CGD expansion, and clean energy pivots provide multiple entry points.

Investors should balance cyclical exposure (such as oil prices and policy) with structural growth bets on cleaner energy and downstream value-added opportunities. Well-positioned firms, such as HPCL, MGL, GAIL, Reliance, and BPCL— all key Oil and Gas Companies in India — anchored by strong domestic demand and government support, offer compelling opportunities within a diversified portfolio. If you’re searching for a stock advisory service to build your equity portfolio, consider Jarvis Invest — an AI-powered platform that tailors portfolios to your risk profile, goals, and investment timeline.

Frequently Asked Questions

Q1. How many stocks are in the oil and gas sector?

Ans. The oil and gas sector in India includes over 50 listed companies across upstream (exploration), midstream (transportation), and downstream (refining & marketing). Key players are part of indices like Nifty Oil & Gas and broader energy segments on NSE and BSE.

Q2. Are oil and gas companies a good investment?

Ans. Oil and gas companies, including major oil companies in India, can be good investments for steady cash flows, dividends, and long-term value. However, they are sensitive to global crude prices, regulations, and ESG trends. It’s important to invest according to your risk profile and time horizon.

Q3. What is the Nifty Oil & Gas Index?

Ans. The Nifty Oil & Gas Index is a sectoral index that tracks the performance of top oil, gas, and energy companies listed on the NSE. It includes stocks from exploration, refining, marketing, and distribution.

Q4. Which are the top Nifty Oil & Gas companies?

Ans. Top constituents of the Nifty Oil & Gas Index (as of 2025) include: Reliance Industries, ONGC, Indian Oil Corporation (IOC), GAIL (India) Ltd, BPCL, HPCL, Petronet LNG, Oil India Ltd

Q5. What is the Nifty Energy Index?

Ans. The Nifty Energy Index is a stock market index that tracks the performance of major energy sector companies listed on the NSE. It includes companies involved in oil, gas, and renewable energy, providing investors with exposure to the energy industry’s overall trends and growth potential.