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OMCs, paint, tyre stocks fall; upstream oil mixed as oil price rises 13%

BPCL, HPCL, IOC, Asian Paints and other downstream oil companies' stock fell, while ONGC, Oil India rose after Brent crude oil spiked 13 per cent

crude oil, oil, lng

Sirali Gupta Mumbai

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Oil-linked stocks tanked in trade on Friday, June 13, 2025, up to 6 per cent after Brent crude oil futures jumped 13 per cent to $78.5 per barrel. The rally in oil prices came after the Israeli military began airstrikes against Iran, targeting nuclear locations to block Tehran from developing atomic weapons, in an operation dubbed 'Rising Lion'. 
 
Israel’s Defence Minister, Israel Katz, also declared a state of emergency shortly after the strikes. The head of the Islamic Revolutionary Guard Corps, Hossein Salami, was killed in the strikes, according to reports.
 
Around 9:32 AM, shares of oil marketing companies (OMCs), paint, and tyre fell amid the market rout. 
 

OMC stocks plunge

Oil marketing companies' shares fell up to 6 per cent. At the last count, Bharat Petroleum (BPCL) shares were down 3.7 per cent, Indian Oil Corporation (IOC) shares 1.96 per cent and Hindustan Petroleum 2.54 per cent. In comparison, BSE Sensex was down 1.06 per cent at 80,829.29. 

Paint in red

Paint stocks fell up to 4 per cent in trade. Asian Paints shares were down 1.16 per cent, Berger Paints 1.88 per cent, Kansai Nerolac shares were down 1.98 per cent, and Akzo Nobel India 0.91 per cent, around the same time.

Tyre stocks skid off

Tyre-related stocks also took a hit and slipped up to 3 per cent in trade. Last checked, JK Tyre shares were down 2.17 per cent, Balkrishna Industries 0.93 per cent, Ceat 0.62 per cent and MRF 0.48 per cent. 

Why did OMCs, paint, and tyre stocks fall after oil prices soared? 

As crude oil is one of the key raw materials used by OMCs, paint, and tyre companies, higher prices lead to a rise in input costs. For OMCs, it squeezes margins. Paint and tyre makers face costlier raw materials, hurting profits. Investors fear lower earnings, leading to a sell-off.
 
"Iran holds about 9 per cent of the world's oil reserves, and any disruption could impact several key Indian sectors, including oil marketing companies (such as BPCL, HPCL, and IOC), paints (like Asian Paints and Berger Paints), as well as the automobile and cement industries. These sectors may experience demand slowdown or margin pressure, if tensions escalate and persist for more than 3–6 months, particularly if Brent crude prices rise above the $82–85 per barrel mark," said Naveen Vyas, senior vice president, Anand Rathi Global Finance.

Oil upstream companies' shares mixed 

Conversely, upstream oil companies, involved in the exploration and production (E&P) of oil and natural gas, stocks traded mixed.
 
Last checked, Oil and Natural Gas Corporation (ONGC) was up 0.81 per cent and Indian Oil 2.64 per cent. However, Reliance Industries (RIL) stock was down 1.51 per cent.  

How do upstream oil companies benefit from oil price hike?

When oil prices soar, upstream companies can sell extracted crude oil at higher rates, leading to improved revenues and profit margins.  

What should investors do now?

HSBC has maintaied a 'Buy' on HPCL, BPCL and IOCL stock with a targets of ₹180, ₹420 and ₹490 respectively.  The brokerage believes volatility in crude is good as this lowers the risk of government intervention in setting the fuel prices, and thus protects margins for OMCs.  "Fuel marketing margins have continued to remain strong (₹10-12/l), driven by lower oil prices, and other fuel cracks like Naphtha and Jet Fuel have also improved c10-20 per cent over last two months, which should support the profitability for the Oil Marketing Companies (OMCs)," the report said.   Further, HSBC analysts expect oil prices to stay low for longer, especially if Opec+ continues increasing supply. They warn that weaker demand after summer could pull Brent crude below the current forecast of $65/bbl for Q4 2025. This would help improve marketing margins for oil companies. Lower oil prices can also reduce their working capital needs.
 

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First Published: Jun 13 2025 | 10:08 AM IST

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