BPCL, IndiGo, Apollo Tyres, other crude-sensitive shares fall up to 4% as oil prices surge

HPCL, BPCL, Spicejet, Apollo Tyres, CEAT and JK Tyre among major losers Hindustan Petroleum Corporation Ltd (HPCL), Bharat Petroleum Corporation Ltd (BPCL), IndiGo, SpiceJet, Apollo Tyres, CEAT, JK Tyre & Industries, SpiceJet and Asian Paints were among the major losers as Brent crude climbed above $114 a barrel. At the time of filing this report at 2.30 pm, BPCL shares dropped over 2 percent, HPCL declined around 3 percent and IOC slipped around 1.9 percent.

Among the Nifty 50 constituents, InterGlobe Aviation Ltd, the parent company of IndiGo, was down nearly 3 percent, while Asian Paints fell about 1 percent. The selling extended to other crude-sensitive sectors as well. Shares of Apollo Tyres fell over 3 percent, while CEAT, JK Tyre & Industries and SpiceJet declined over 4 percent. In the paints space, Kansai Nerolac Paints and Berger Paints traded 1 percent lower, reflecting pressure in the sector amid the surge in the crude oil prices.

Similarly, upstream oil producers, including Oil India was also under pressure and was trading over 1 percent lower. However, ONGC was trading positive as higher oil prices are expected to support their realisations. Oil prices have remained elevated amid drone strikes on Saudi Aramco’s Shaybah oilfield, Houthi attacks on energy infrastructure and tankers, and persistent uncertainty surrounding the prolonged conflict and stalled negotiations.

The heightened risk of disruptions to crude production and supply fears has sustained a geopolitical risk premium in oil prices. Earlier on Thursday, Saudi Aramco ordered the evacuation of its headquarters in Dhahran on the Gulf near Bahrain, Reuters reported, as fighting intensified between the world's largest crude exporter and Yemen-based Houthis. Crude oil price rise trajectory On a weekly basis, Brent is set to close higher for a third successive week ⁠following gains in the last two weeks.

Brent has gained 4.2 percent over the past week and 12.5 percent over the past month. On a year-to-date basis, crude oil prices have surged 81.4 percent, reflecting the sharp impact of geopolitical uncertainty on energy markets. Higher crude prices typically hurt OMCs because retail fuel prices do not always immediately reflect higher input costs, compressing marketing margins. Airlines also face pressure as aviation turbine fuel is one of their largest operating expenses, while tyre and paint manufacturers are vulnerable to rising costs of crude-linked raw materials.