Effect of Reliance and Saudi ARAMCO Deal News on Oil Market

An analysis of the impact of the Reliance and Saudi Aramco deal on the domestic crude-oil market

Abstract

We analyzed the cross-sectional effects of mega deal between two giant oil-companies, i.e., Reliance Industries and world’s largest off-shore crude-oil company named - Saudi Aramco on the various domestic crude-oil marketing companies such as Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL). In order to observe the shock transmission of the deal news, share-prices of IOCL – one of the biggest oil-trading company, BPCL, HPCL were chosen. Because the news of informal mega-deal came into limelight for the first time in December 2018, with possibility of sealing the deal in future, therefore traded FUTCOM instrument for CRUDEOIL commodity under Energy segment was considered for the duration of January 2019 to December 2019 from the MCX database.