Crude-Sensitive Stocks Slide As Oil Prices Jump Following Israel's Airstrikes On Iran

OMCs, Paint and Tyre Stocks Tumble Amid Rising Geopolitical Tensions

Crude-sensitive stocks, including oil marketing companies (OMCs), paint manufacturers, and tyre makers, saw steep declines on Friday after global oil prices surged over 9%, triggered by Israel’s targeted airstrikes on Iran. The escalation sparked fresh concerns about supply disruptions and inflationary pressure on input costs for crude-linked industries, unsettling investor sentiment across sectors.

Brent & WTI Futures Jump Over 9%

• Brent crude spiked over 9%, reaching a multi-month high of $75.61 per barrel.
• WTI crude followed suit, climbing to $74.39 per barrel

The price rally came after Israel launched “Operation Rising Lion”, a coordinated strike on Iran’s nuclear and military infrastructure. Iran responded by threatening retaliation, with multiple explosions reported in Tehran, raising concerns over a deeper regional conflict.

OMC Stocks Drop as Input Costs Threaten Margins

The sharp rise in crude prices put immediate pressure on oil marketing companies. HPCL shares fell around 4.5%, BPCL declined over 4%, and IOC dropped about 3% in early trade. Higher crude prices can compress margins for these companies, particularly in the absence of commensurate hikes in retail fuel prices.

Upstream Oil Producers Gain

In contrast, oil producers ONGC and Oil India benefited from the crude rally, rising to 3% in early trade. Rising global prices improve realisation for upstream companies, offering some relief to the broader oil and gas sector.

Paint and Tyre Stocks Fall

Paint manufacturers also bore the brunt of the oil rally. Shares of Asian Paints fell nearly 2% after a previous session rally driven by a large block deal. Berger Paints and Indigo Paints dropped around 4%. Crude oil is a key input in paint manufacturing, making such companies vulnerable to input cost inflation. Similarly, tyre makers like Apollo Tyres slid 2%, while MRF declined over ₹400 per share, reflecting cost pressure from raw material price hikes.

Outlook

As tensions escalate in the Middle East, market watchers are bracing for continued volatility in crude oil prices. Sectors exposed to crude inputs are expected to remain under pressure if conflict-driven supply shocks materialise.

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