Reliance, Indian Oil, BPCL: Oil-linked stocks decline as global crude oil prices rebound to $97/barrel

Crude oil-linked stocks declined during the morning market hours on Monday, September 7, as investors reacted to global crude oil prices surpassing $97 per barrel (bbl) due to further supply chain disruption concerns at the Strait of Hormuz amid the prolonged conflict raging between the United States and Iran.

Global oil prices surged at the beginning of this week after a marginal pullback during the second half of the previous week, resulting in a decline to near $93 per bbl levels, when investors booked profits in the commodity markets.

After the opening bell on Monday, September 7, the sectoral benchmark Nifty Oil & Gas declined 0.41% to an early market low of 11,141.40 points, in comparison to 11,187.65 points at the previous equity market close.

The broader benchmark equity indices were also trading lower on Monday’s market due to cautious sentiment among investors, with elevated oil prices and IT stocks dragging the losses intraday.

Oil downstream companies like OMC stocks, aviation stocks, tyre stocks, and paint stocks, among other oil-sensitive stocks, were witnessing selling pressure in the market as the higher commodity prices directly impact their overall input cost.

"Energy importers such as India, Indonesia and South Korea may continue to see volatility as higher import bills pressure external balances and inflation," said HSBC analysts in latest investment outlook report.

Oil-linked stocks in focus today

How do higher oil prices impact OMCs?

A higher cost of crude oil for oil marketing companies (OMCs) increases the overall raw material purchase cost in a particular period, in turn having a direct impact on the margins and profitability as the total expenses rise due to higher input costs.

OMCs purchase raw crude oil in order to then refine it into petrol, diesel, and other petroleum products. So, if the raw material cost rises in the market, then it always has a negative impact on companies.

In contrast, if energy prices fall in the market, then these companies gain from the margin benefit in a particular period.

Companies like Indian Oil, Reliance, BPCL, Hindustan Petroleum, among others are listed OMCs on the Indian stock market.

Aviation sector

In the case of listed aviation stocks like IndiGo (InterGlobe Aviation) and SpiceJet, the elevated crude oil prices in the market in turn mean that the cost of fuel consumed in a particular period rises in line with the rates.

One of the largest expenses for aviation companies is to acquire aviation turbine fuel (ATF) or jet fuel. Any negative change in global energy prices has a ripple effect on jet fuel cost, which increases the input cost for the airline.

IATA's Jet Fuel Monitor data showed that ATF prices were around a weekly average of $156.85 per bbl, hovering around an elevated level due to the geopolitical conflict in West Asia challenging the supply of energy in the market.

Paints sector

Paint sector stocks like Asian Paints, Berger Paints, JSW Dulux, among others remain in focus of investors due to the volatility in crude oil prices in the global market. On Monday, paints stocks were trading in the red in the early hours due to oil rising above $97 per bbl.

Paint companies are classified as crude oil-sensitive, as these firms use several key raw materials like resins, solvents, and other petrochemical derivatives during their manufacturing process, which link them to energy prices.

Any negative change in crude oil prices, in turn, creates pressure on the operating margins of the paintmakers, due to the increase in input costs in a particular period.

Tyres sector

Tyre companies use crude oil derivatives as raw materials during their production process to make key chemical components used to create synthetic rubber, polymers, reinforcement fabrics, chemical additives, among other things.

Hence, the same input cost impact risk remains for stocks like JK Tyre, Apollo Tyres, MRF, and others in the sector.

While higher crude oil prices can increase the cost of raw materials, if there is a decline in prices in the market, the company’s operating margins will enjoy a direct benefit from the same.

Oil rebounds above $97 per barrel

In India, crude oil prices (Indian basket) surged to $97.32 per barrel (bbl) in September 2026, increasing from $90.19 per bbl in August, and $82.04 per bbl in July 2026.

Crude oil prices in the global market surged to $97.31 per barrel (bbl) on Monday’s market, as commodity market investors focused on the elevated geopolitical tensions between the United States and Iran, with no signs of a peace agreement.

Investing.com data showed that benchmark Brent crude oil prices surged 1.06% intraday to an early market high of $97.31 per bbl on Monday, in comparison to $96.28 per bbl at the previous commodity market close.

Oil prices have risen more than 7% in the last five market sessions and were trading over 16% higher in the last one-month period. In the last three months, energy prices have risen 4.5%.

The latest announcement from US Central Command (CENTCOM) showed that the American forces have carried out three military strikes on Iranian crude oil carriers in response to the Islamic Revolutionary Guard Corps (IRGC) launching missiles towards US Navy warships.

Reports from Al Jazeera said that Iran’s security official Mohsen Rezaei said that Tehran will declare a restricted zone near the Strait of Hormuz and announce a new shipping route agreed on with Oman in the coming period.