IndiGo, BPCL, Asian Paints, CEAT: Oil-linked stocks slide as crude prices rise more than $85/barrel

Oil-related stocks traded lower by 2–3% on Tuesday, July 14, tracking a surge in crude oil prices amid escalating geopolitical tensions.

Crude oil prices in the global market gained 14% to more than $85 per barrel (bbl) within two days as investors focused on the rising risk of another supply chain disruption due to the recent escalations between the United States and Iran amid the absence of a final peace agreement.

Investing.com data showed that the benchmark Brent crude oil prices surged nearly 14% to a high of $85.66 per bbl since the commodity markets re-opened this week, starting Monday, July 13. Also, the US Central Command (CENTCOM) said that its forces will resume blockading maritime traffic entering and exiting Iranian ports on July 14.

Latest updates from the West Asian front showed that the United States has continued its attacks against Iran, while US President Donald Trump informed Congress that “limited” military action against Iran has resumed.

Following the surge, oil-sensitive stocks were seen lower on Tuesday. 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.

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

Shares of OMCs declined 2% each, with Bharat Petroleum Corporation (BPCL) falling to an intraday low of ₹302.05, Hindustan Petroleum Corporation (HPCL) at ₹383.30, and Indian Oil Corporation (IOCL) at ₹137.33 on the NSE.

In the aviation space, InterGlobe Aviation (IndiGo) declined over 3% to an intraday low of ₹5,064.50 on the NSE, while SpiceJet shares slipped 1.5% to ₹10.96.

Among paint stocks, Asian Paints fell 3% to ₹2,579.90, while Berger Paints India dropped 2% to ₹484.35. Kansai Nerolac Paints traded 1.3% lower at ₹199.57, and Indigo Paints declined 3% to ₹1,020.20 on the NSE.

Furthermore, tyre stocks were also under pressure, with CEAT declining 3% to an intraday low of ₹3,761 on the NSE. MRF slipped 1% to ₹1,30,115, while Balkrishna Industries fell 1.3% to ₹2,187. Apollo Tyres also traded 3.4% lower at ₹425.50 on the NSE.

Check what Citi analysts said on OMCs

In a note on Tuesday, Citi’s global commodities team said that recent disruptions across the Middle East, China and Russia have tightened global product balances, even as crude supply remains relatively resilient. This has supported elevated refining cracks, creating a backdrop of softer crude prices alongside stronger product margins.

The analysts said this dynamic could be favourable for oil marketing companies’ integrated margins, with IOCL, BPCL and HPCL seen as key beneficiaries, subject to the status quo on excise duties, export taxes and retail fuel prices. Separately, they added that ONGC has been called upon for national service following government directions to develop a strategic petroleum reserve (SPR) facility.

JP Morgan analysts on paint sector

Analysts from JPMorgan said paint demand is witnessing divergent trends across geographies, with secondary offtakes moderating somewhat. They noted that price hikes continued in June, while competition remains stable yet firm.

The analysts added that the on-ground impact of the JSW–Akzo merger has been limited so far. They also highlighted that order fulfilment faced temporary constraints amid the Middle East conflict.