Paint stocks, including Berger Paints, Asian Paints, and Kansai Nerolac, were trading with deep losses in Monday’s session, March 2, reflecting broader market weakness as tensions in the Middle East escalated following unprecedented joint US and Israeli strikes on Iran over the weekend, triggering a sharp jump in crude oil prices.
Rising crude oil prices are a concern for India, which imports around 85% of its crude requirements.
Sectors that rely heavily on crude-based raw materials—such as the paint industry—are likely to be significantly impacted.
Higher crude prices increase input costs, compress gross margins, and can weigh on profitability for paint manufacturers. Companies may attempt to pass on the higher costs to consumers, potentially affecting demand.
Amid this negative sentiment, Berger Paints (India) fell 5.44% to ₹431.55 per share, while Asian Paints dropped 3.2% to ₹2,298. Akzo Nobel India tumbled 5.34% to ₹2,778, while Shalimar Paints and Kamdhenu Ventures India declined 3.2% and 6.10%, respectively. Kansai Nerolac Paints was also down 4.38% at ₹194.6.
US–Iran conflict sends crude oil prices to a 14-month high
Crude oil prices, which had already been strengthening in recent weeks, surged sharply in Monday’s trade after the US and Israel carried out joint military strikes on Iran on Saturday. Reports suggested that several senior Iranian security officials were killed in the attack.
Brent crude futures rose 13%, surging above $80 per barrel for the first time since January 2025 to touch an intraday high of $82.37, while WTI crude futures jumped 12.3% to around $75 per barrel.
Hours after the attack, Iran retaliated by targeting US military installations around the Gulf, sending shockwaves through the global energy supply chain. The joint US–Israel strike on Iran, which officials said had been planned for months, followed unsuccessful negotiations over Iran’s nuclear program and repeated warnings from US President Donald Trump.
Traders began pricing in the risk that oil supplies from Iran and other parts of the Middle East could slow or be disrupted.
Escalation threat looms over key oil transit route
Concerns also mounted over the potential for escalation and possible disruptions to the Strait of Hormuz, through which nearly 20% of global oil flows and over 40% of India’s crude imports transit.
Tehran has reportedly insisted that the strait remains open, but shipping companies have reportedly started rerouting vessels away from the narrow waterway.
Iran is the fourth-largest oil producer in OPEC, producing just over 3 million barrels per day in January. The country shares a coastline along the Strait of Hormuz, one of the world’s most critical chokepoints for global oil trade.
Meanwhile, OPEC+ agreed on Sunday to increase production by 206,000 barrels per day in April, ending a three-month pause. However, this is well below the previously considered range of 411,000–548,000 barrels per day.
If crude oil prices remain elevated over the long term, it could lead to higher consumer prices and rising inflation. This, in turn, may prompt central banks to keep interest rates higher for longer, reducing the appeal of riskier assets for investors.
(With inputs from agencies)
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
