The world is moving towards adopting green and cleaner sources of energy. From solar parks to wind farms, the choice of the people as well as companies for investment is changing. This green sift is reshaping global energy markets and raising serious questions about the future of traditional oil and gas stocks.
As climate concerns grow and cleaner technologies become more affordable, understanding the future of oil and gas stocks is important. So, let us explore how this sift is impacting the stocks.
What Is Green Siff?
Green Sift refers to the Green Shift Initiatives of a company to help reduce carbon emissions and move towards cleaner energy adoption. The key features of this are:
- Helps buildings earn revenue from green transitions.
- Supports solar adoption with tracking and incentives.
- Encourages electric vehicle usage and infrastructure.
- Offers real-time monitoring of energy and emissions.
- Aligns with climate goals and ESG investing trends.
This shift blends environmental value with financial returns.
How Is the Green Shift Impacting Indian Oil & Gas Stocks?
While the green sift is happening fast, investors are also looking forward to understanding how it is impacting the oil and gas stocks. So, here are some key points that you must know:
1. Market Volatility Intensifies
The Indian oil and gas sector has faced heightened volatility in 2025, largely due to global crude price swings, OPEC+ output changes, and geopolitical uncertainty. Brent crude prices dropped nearly 23% year-on-year in May 2025, leading to turbulence in related Indian stocks.
Despite this, the sector’s importance to India’s energy security and economic growth continues to attract both domestic and foreign investment.
2. Policy Push for Cleaner Energy
Government policy is focusing on cleaner fuels, with a focus on natural gas and renewables. Recent reforms allow up to 49% foreign ownership in public sector oil and gas projects, aiming to attract capital and modernize the industry.
These policy changes support companies in adapting their strategies for a greener energy mix.
3. Divergence in Stock Performance
Stock performance within the sector has been mixed. While some companies have delivered robust multi-year returns, others have struggled amid price volatility and shifting demand.
For example, the Indian Oil Corporation share price has displayed an upside post investment of ₹10.86 billion in its subsidiary, Terra Clean, to develop 4.3 GW of renewable energy capacity.
4. Refining Margins and Gas Demand Provide Support
Despite crude price declines, refining margins rebounded sharply in 2025. The benchmark Gross Refining Margin (GRM) jumped 121% year-on-year in May. This is supported by lower crude costs and stronger demand for gasoline, gasoil, and jet fuel.
5. Corporate Adaptation and ESG Initiatives
Major Indian oil and gas companies are accelerating investments in gas infrastructure, emissions reduction, and renewable energy projects. Firms are enhancing ESG disclosures and sustainability initiatives to align with investor expectations and regulatory requirements.
What Lies Ahead for Oil & Gas Stocks in India?
Oil and gas stocks in India are likely to stay relevant, but their future depends on how well companies respond to the green transition. The key factors to watch:
- Energy demand will support short-term to mid-term growth
- Clean energy investments will drive long-term valuation
- Government support for gas and hydrogen will shape strategies
- Investor focus will shift toward ESG-compliant companies
- Innovation and diversification will determine competitiveness
Conclusion
The smart strategy is to focus on companies that are adapting, not avoiding change. Oil and gas still matter, but their future depends on how they evolve.
For investors, this means backing firms with strong financials, visible efforts in clean energy, and clear sustainability goals. Avoid companies that delay transition. Invest where there is intent, direction, and readiness for a greener energy future.