The shares of Asian Paints, Indigo Paints and other paint makers plunged up to 6% to multi-month lows on Monday as crude oil prices shot up amid strong escalations in the ongoing tensions in the Middle East after US and Israel attacked Iran, killing the latter’s supreme leader Ayatollah Ali Khamenei and sparking strong retaliation from the country.

Crude oil is a key raw material source for paint companies because many of their inputs are petroleum-based derivatives. Hence, the expectations of rising oil prices putting pressure on their margins may have dampened investor sentiment for the shares of these companies.

Asian Paints shares declined more than 3% to trade at Rs 2,298 apiece, the lowest level seen by the stock since June 27, 2025. The stock was among the top losers on benchmark indices Sensex and Nifty.

Indigo Paints shares plunged nearly 6% and Berger Paints shares tumbled more than 5% to hit their respective 52-week lows on Monday morning.

Iran-Israel war fuels spike in oil prices

Brent Crude jumped more than 6.5% to $77.63 per barrel, while WTI Crude surged over 65 to $71.23 per barrel, as seen at around 11 am. More than 20% of the world’s oil passes through the Strait of Hormuz, which connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. The heavy missile strikes around the area have raised worries about supply constraints, leading to a spike in oil prices.

At least three ships were attacked today near the Strait of Hormuz as Iran continues to launch retaliatory strikes across the Middle East, according to a report by BBC. The report mentioned that international shipping has almost come to a standstill at the entrance to the area.

Paint companies likely to face margin pressure from rising oil prices

This further fuelled concerns around supply disruption, boosting oil prices. “Upstream energy and defence may see relative support, while oil-sensitive sectors such as OMCs, paints, tyres, aviation and chemicals face margin pressure. Crude remains the key macro variable for Indian equities under the current escalation scenario,” said JM Financial in its latest note.

Notably, there is no official confirmation yet on whether the Hormuz Strait is closed, obstructing oil transport through the strait. UK’s second largest bank Barclays on Saturday increased its forecast for Brent Crude oil futures to $100 per barrel. “Oil markets might have to ‌face their ⁠worst ⁠fears on Monday. As things stand right now, we think Brent could hit $100 (per barrel), as the market grapples with the threat of a potential supply disruption amid a spiraling security situation in the Middle East,” the bank said in its report.

Iran is located along the Strait of Hormuz, through which approximately a fifth of the world’s oil supply passes, Ali Vaez, who heads the Iran Project at the International Crisis Group, said in a post on X. “Even limited disruption could spike energy prices, fuel inflation, and rattle global markets,” he added.

This comes amid broader market weakness, with Indian benchmark indices opening sharply lower and wiping off a significant chunk of investors’ wealth. At the open, Sensex plunged 2,743 points to start the day at 78,543, while the Nifty 50 plunged 519 points to open at 24,659. The sharp decline wiped off more than Rs 7.8 lakh crore from the total market capitalisation of all companies listed on the BSE at open.

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