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BPCL, HPCL, IOC, Asian Paints, IndiGo, Ixigo and other crude-linked stocks fell after Brent crude surged above $76 per barrel following US strikes on Iran, raising concerns over higher fuel and raw material costs.
Reviewed and Rewrite by
Rudransh Sangwan
Crude-linked stocks came under sharp selling pressure on Tuesday after global oil prices surged following fresh US military strikes on Iran, intensifying geopolitical tensions in the Middle East and raising concerns over potential disruptions to global energy supplies.
The rise in crude oil prices weighed on sectors that are highly dependent on petroleum-based raw materials and fuel costs. Shares of BPCL, HPCL, Indian Oil Corporation (IOC), Asian Paints, IndiGo, Ixigo, Pidilite Industries, MRF, Apollo Tyres, and several other companies traded lower as investors assessed the impact of higher energy prices on corporate profitability.
Brent crude climbed nearly 2.8% to trade above $76 per barrel, while West Texas Intermediate (WTI) rose above $72 per barrel after the United States carried out military strikes on Iranian targets. The escalation also followed tighter sanctions on Iranian oil exports, increasing fears of supply disruptions in one of the world's most important energy-producing regions.
The latest decline in crude-sensitive stocks was triggered by a sharp rise in international oil prices.
Higher crude oil prices generally increase production, transportation, and raw material costs for several industries. Companies that rely heavily on petroleum products often face margin pressure when crude prices rise rapidly, especially if they are unable to immediately pass on higher costs to consumers.
The latest geopolitical developments have also increased concerns about supply disruptions through the Strait of Hormuz, one of the world's busiest oil shipping routes.
Oil Marketing Companies (OMCs) were among the biggest losers during the trading session as rising crude prices are expected to impact refining and fuel marketing margins.
| Company | Share Price Movement |
|---|---|
| BPCL | ▼ 3.15% |
| HPCL | ▼ 3.15% |
| Indian Oil Corporation (IOC) | ▼ 1.84% |
Higher international crude prices increase input costs for refiners and fuel retailers, while domestic fuel pricing dynamics often limit their ability to immediately recover these higher costs.
Airline companies also witnessed selling pressure as aviation turbine fuel (ATF) remains one of their largest operating expenses.
Higher crude oil prices directly increase fuel costs, affecting profitability across the aviation sector.
Among the major losers:
Travel companies also tend to face slower demand when higher fuel costs translate into increased airfares.
Paint manufacturers also traded lower as several of their key raw materials are crude oil derivatives.
Companies such as Asian Paints, Berger Paints, Kansai Nerolac, and Indigo Paints use petroleum-based chemicals and solvents in manufacturing, making them highly sensitive to changes in crude oil prices.
| Company | Decline |
|---|---|
| Indigo Paints | ▼ 2.70% |
| Asian Paints | ▼ 2.69% |
| Kansai Nerolac | ▼ 1.64% |
| Berger Paints | ▼ 0.76% |
| Grasim Industries | ▼ 0.55% |
Higher raw material costs could weigh on margins if companies are unable to pass on price increases to customers.
Packaging and adhesive manufacturers also witnessed weakness as they depend heavily on crude-derived raw materials such as polypropylene (PP), polyethylene (PE), and other petrochemical products.
Pidilite Industries declined 1.44%, while Supreme Industries slipped 0.49% during the session.
These companies could experience margin pressure if crude prices remain elevated over an extended period.
Tyre manufacturers were another segment affected by rising oil prices.
Synthetic rubber, carbon black, and several other raw materials used in tyre production are linked to crude oil prices.
MRF declined 1.37%, while Apollo Tyres fell 0.83% as investors anticipated higher input costs.
India imports nearly 85% of its crude oil requirements, making the economy highly sensitive to fluctuations in global oil prices.
A sustained rise in crude prices can lead to:
However, upstream energy producers and oil exploration companies generally benefit from higher crude prices through improved realizations.
The latest spike in crude oil prices highlights how geopolitical events can quickly impact multiple sectors of the Indian stock market. Oil marketing companies, airlines, paint manufacturers, tyre makers, and packaging firms are among the most vulnerable industries during periods of rising energy costs.
Investors will continue monitoring developments in the Middle East, particularly around the Strait of Hormuz and global crude supply. Any further escalation could keep energy prices elevated, increasing pressure on crude-sensitive sectors. Conversely, easing geopolitical tensions or a decline in oil prices could provide relief to these industries in the coming weeks.
Investors should closely monitor Brent crude prices, geopolitical developments in the Middle East, domestic fuel pricing decisions, aviation turbine fuel (ATF) prices, refining margins, and management commentary during the upcoming Q1 FY27 earnings season.
| Highlights | Details |
|---|---|
| Trigger | US Military Strikes on Iran |
| Brent Crude | Above $76 per barrel |
| WTI Crude | Above $72 per barrel |
| Worst Affected Sectors | OMCs, Aviation, Paints, Tyres, Packaging |
| Key Stocks in Focus | BPCL, HPCL, IOC, Asian Paints, IndiGo, Ixigo, Pidilite, MRF |
Higher crude oil prices increase refining costs, fuel marketing losses, and pressure margins for oil marketing companies.
Airlines use aviation turbine fuel (ATF), making fuel one of their largest operating costs. Rising crude prices generally increase ATF prices and reduce profitability.
Paint manufacturers use several petroleum-based chemicals and solvents as raw materials, leading to higher production costs when crude oil prices increase.
Oil marketing companies, airlines, paint manufacturers, tyre makers, packaging companies, adhesives manufacturers, logistics firms, and chemical companies are among the sectors most affected by rising crude prices.