HPCL, BPCL, Asian Paints, CEAT: Oil-linked stocks slide as crude prices rise more than $114/barrel

Oil-related stocks traded lower by 2–5% on Friday, October 23, tracking a surge in crude oil prices amid escalating geopolitical tensions.

Crude oil prices in the global market gained 1% to $114.7 per barrel as investors focused on escalating tensions in West Asia and concerns over potential supply disruptions.

The decline in oil prices comes after US President Donald Trump determined that petroleum production and refining were essential to national defence, opening the door for more US fossil fuel projects.

Further, escalating tensions in the Middle East, including between Saudi Arabia and Yemen’s Houthis, and concerns around the Strait of Hormuz are leading to continued and potentially worsening supply disruptions in the region.

Investing.com data showed that the benchmark Brent crude oil prices surged 3% so far this week to a high of $114.7 per bbl since the commodity markets reopened, starting Monday, October 19.

Following the surge, oil-sensitive stocks were seen lower on Friday. Rising crude oil prices are generally negative for several sectors in India, as they lead to higher input costs and margin pressures.

For oil marketing companies (OMCs) such as Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited, higher crude prices can compress marketing margins, especially if retail fuel prices are not fully passed on due to government intervention.

The decline in HPCL shares can also be attributed to a 6% fall in September quarter net profit as losses on sale of fuels like petrol, diesel and cooking gas LPG wiped away bumper gains from refining margins.

Tyre companies face cost pressures as crude-linked derivatives like synthetic rubber become more expensive, impacting players.

Similarly, paint companies like Asian Paints and Berger Paints see margins squeezed since a significant portion of their raw materials are crude-based.

Share price trends

Among paint stocks, Asian Paints fell 1% to ₹2,260, while Berger Paints India dropped 2% to ₹459.30. Kansai Nerolac Paints traded 2.5% lower at ₹178.5, and Indigo Paints declined 2% to ₹993.50 on the NSE.