Major oil-linked companies stock slump after brent crude oil slips 3%

All major oil-linked companies' stocks sank up to 19 per cent, on Monday, April 7, 2025 after crude oil prices slid more than 3 per cent in trade. Oil prices extended last week's losses as trade tensions between the United States and China stoked fears of a recession that would reduce demand for crude. At the last count, Brent crude oil futures were down 2.82 per cent at $63.73 per barrel. 

 

Around 12:29 PM, upstream oil companies involved in the exploration and production (E&P) of oil and natural gas traded in deep red. Reliance Industries (RIL) shares were down 4.6 per cent, Oil and Natural Gas Corporation (ONGC) share was down 4.4 per cent and Indian Oil shares were down 6.1 per cent. 

 

When oil prices drop, upstream companies face reduced revenue, which can lead to cost-cutting measures, reduced profits, and in some cases, financial losses.

 

Despite the fall in crude oil prices, while oil marketing companies (OMCs) stocks traded mixed, paint, aviation, and tyre stocks fell amid the market rout. 

 

Among OMCs, last seen, Bharat Petroleum shares were up 0.21 per cent. However, Indian Oil Corporation (IOC) shares were down 2.38 per cent and Hindustan Petroleum shares were down 2.04 per cent. In comparison, BSE Sensex was down 4.37 per cent at 72,069.94. 

 

Crude oil is a raw material for OMCs, which are involved in the distribution and sale of petroleum products, including gasoline, diesel, jet fuel, and heating oil. 

 

Among the paint stocks, Asian Paints shares were down 1.28 per cent, Berger Paints shares were down 1.66 per cent, Kansai Nerolac shares were down 3.3 per cent, and Akzo Nobel India were down 4.3 per cent, around the same time.

 

Crude oil is a key ingredient in many chemicals used in the production of paints, coatings, and related products. 

 

Besides, among the aviation stocks, InterGlobe Aviation or IndiGo shares were down 4.4 per cent and SpiceJet shares were down 5.8 per cent. 

 

The relationship between aviation and crude oil is vital, as jet fuel, the primary fuel used by airlines, is derived from crude oil. 

 

Tyre-related stocks also slipped with JK Tyre shares down 6.4 per cent, Balkrishna Industries down 5.4 per cent, Ceat down 8.75 per cent and MRF down 2.86 per cent. Crude oil is a raw material used in the production of rubber and other chemicals used in the manufacturing of tyres.