On June 13, Indian stock markets witnessed a broad selloff in sectors heavily dependent on crude oil, following a sharp surge in global oil prices. This came in the wake of Israel's military strikes on Iran, escalating tensions in the Middle East and fueling fears of a prolonged geopolitical crisis that could disrupt oil supply routes and push energy prices even higher.
Crude Oil Spike:
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Brent crude surged over 9%, touching $75.61/barrel, marking a multi-month high.
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WTI crude also climbed more than 9%, reaching $74.39/barrel.
This spike was triggered by Israel’s “preemptive strikes” on Iran, reportedly targeting parts of its nuclear and missile infrastructure. With Iran vowing a strong retaliatory response, investors are bracing for further price volatility in the oil market.
Impact on Indian Stocks:
🔻 Oil Marketing Companies (OMCs): Down
OMCs were among the hardest hit, as higher crude oil prices inflate their procurement costs, squeeze refining margins, and reduce profitability.
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HPCL: -4.5%
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BPCL: -4.2%
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IOC: -3%
These companies sell fuel at government-regulated prices, so sudden surges in crude prices cannot always be passed on to consumers, leading to near-term margin pressures.
🔼 Oil Producers: Up
In contrast, upstream oil companies like ONGC and Oil India rallied up to 3%, as they benefit from selling crude at higher international prices.
Other Crude-Linked Sectors:
🔻 Paint Manufacturers: Pressured
Paint companies use crude derivatives like solvents and resins in production. Rising crude means higher raw material costs, leading to potential margin compression.
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Asian Paints: -2%
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Indigo Paints: -4%
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Berger Paints: -4%
This drop came despite a massive Rs 7,703 crore block deal in Asian Paints just a day earlier.
🔻 Tyre, Adhesive & Aviation Stocks: Weak
Sectors such as tyres and aviation that use crude-based inputs or fuels were also under stress:
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Tyre companies like MRF, Apollo Tyres, and CEAT fell 2–3%.
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Airline stocks like IndiGo and SpiceJet dropped due to fears of rising ATF (aviation turbine fuel) costs, which directly impact operating expenses.
Expert View:
“Sectors that use oil derivatives as inputs like aviation, paints, adhesives and tyres will be hit hard. Oil producers like ONGC and Oil India will remain resilient. Investors can wait and watch how the situation unfolds,”— Dr. V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services
Investor Sentiment & Outlook:
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The India VIX (volatility index) rose sharply, reflecting rising investor anxiety.
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Most analysts expect continued pressure on OMCs and consumer stocks if crude sustains above $75–80 per barrel.
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Market participants are advised to stay cautious and monitor geopolitical developments closely, as any further escalation could trigger more downside, especially in oil-sensitive sectors.
In short, unless there’s a quick de-escalation in the Middle East, crude-linked sectors in India are likely to remain volatile and underperforming in the near term.
