Oil prices exceed $100 amid Iran-Israel tensions. Asian Paints, IndiGo and other crude oil sensitive stocks fall up to 4%
Shares of Asian Paints and Indigo Paints fell up to 2 per cent, while IndiGo fell nearly 4 per cent. MRF and Apollo Tires were down around 1% and 4% respectively during morning trading hours.
These stocks had earlier witnessed a sharp decline after crude oil prices crossed the key psychological level of $100 for the first time since Russia’s invasion of Ukraine in 2022. Oil prices later cooled briefly on hopes of an early end to the conflict that broke out earlier this month after the United States and Israel reportedly launched a missile strike in Iran that killed Supreme Leader Ayatollah Khamenei, followed by massive retaliation from Tehran.
Iran reportedly set fire to two oil tankers in Iraqi waters on Wednesday and warned the world should brace for oil prices to hit $200 a barrel. “Be prepared for oil prices to hit $200 a barrel, because oil prices depend on regional security. You have destabilized it,” a spokesman for Iran’s military command said.
Iran also attacked fuel tanks at a facility in Muharraq, Bahrain, the Interior Ministry said. Iraqi security officials added that Iranian explosives-laden boats attacked two fuel oil tankers. Additionally, several drones crashed into fuel storage tanks at Oman’s Salalah port, causing at least two tanks to catch fire.
The incident has further dampened hopes of a short-term end to the Middle East conflict and the resumption of normal shipping through the Strait of Hormuz, a vital gateway for global oil trade.
The escalation of hostilities has sent oil prices soaring even as the International Energy Agency (IEA) agreed to release a record 400 million barrels from member countries’ strategic reserves to ease supply constraints. As of 8:45 a.m., Brent crude futures rose more than 9% to $100.3 per barrel, and WTI crude oil rose more than 8% to $94.66 per barrel.
In the last one month, shares of Asian Paints and Berger Paints have fallen around 7%, while Indigo Paints has slumped 17%. MRF was down 10% and Apollo Tires was down 14%. During this period, IndiGo shares fell 13%, while SpiceJet fell over 26%.
Paint and tire companies rely on crude oil as a key raw material, and rising oil prices could put pressure on their margins. For airlines, rising oil prices lead to increased costs of aviation fuel.
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