Phase 2: The Downside for Upstream Producers

While cheap oil is good for the country, it is often bad for companies that produce oil.

& These stocks face "price realization" pressure. If the global price of Brent crude drops due to a surge in Venezuelan supply, these companies earn less for every barrel they extract from Indian soil. We have already seen the Nifty Oil & Gas Index face volatility. Investors are shifting money out of "producers" and into "consumers" because they anticipate a long-term decline in global oil prices.