IndiGo, BPCL, HPCL Fall As Oil Jumps Above $76 On Fresh US-Iran Tensions

Shares of crude-sensitive companies traded lower on Wednesday after global oil prices surged following fresh US military strikes on Iran, reviving concerns over supply disruptions in the Middle East and higher input costs for fuel-intensive sectors.

At around 10:30 am, shares of airlines, oil marketing companies (OMCs) and paint makers were among the biggest losers. InterGlobe Aviation, the parent of IndiGo, declined 2.14% to ₹5,281.20 after hitting an intraday low of ₹5,228.85, while SpiceJet slipped 1.04% to ₹11.41.

Among state-run fuel retailers, Bharat Petroleum Corporation (BPCL) fell 3.87% to ₹301.80 and Hindustan Petroleum Corporation (HPCL) declined 4.13% to ₹389.20. Indian Oil Corporation (IOC) also traded lower. Paint major Asian Paints dropped 1.52% to ₹2,689.90 as investors assessed the impact of higher crude-linked raw material costs on margins.

Oil Rises As Middle East Tensions Escalate

The selloff followed a sharp rise in crude oil prices after the United States struck more than 80 targets in Iran in response to attacks on commercial shipping in the Strait of Hormuz, one of the world's most important oil transit routes.

Brent crude rose nearly 3% to trade above $76 a barrel, while the prompt spread moved back into backwardation, a bullish market structure in which near-term contracts trade above longer-dated ones. The spread widened to 26 cents per barrel, reversing the contango structure seen earlier this week, indicating renewed concerns over near-term supply availability.

The US also revoked a sanctions waiver that had allowed Tehran to export oil, further tightening expectations around global crude supplies. Iran has warned of retaliation, while reports of fresh drone and missile attacks have heightened fears of a broader regional conflict.

Carolyn Kissane, Associate Dean at New York University's Center for Global Affairs, told Bloomberg that the latest rally in crude could prove temporary unless tensions escalate further.

"The US action sends a signal to Iran that it can't act with impunity, without risking a return to all-out hostilities," Kissane said. "This is the new normal - a ceasefire that's not really a ceasefire - and we'll see episodes like this periodically. Markets are already getting used to it."

Analysts Advise Caution Amid Renewed Volatility

Market participants said higher crude prices could weigh on sectors that depend heavily on petroleum products, including airlines, fuel retailers and paint manufacturers, by increasing operating and raw material costs.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the renewed geopolitical tensions have temporarily clouded improving market sentiment.

"With the renewed US-Iran tensions and the consequent spike in Brent crude to $76, the market is again back to uncertain territory. How long this would last and what would be its consequences are now in the realm of uncertainty. The market was slowly gaining strength on positive FII activity and improving macro fundamentals. The renewed US-Iran tensions have put a temporary question mark on this positive development. Therefore, investors have to wait and watch the developments," he said.