Summary:
Oil-sensitive stocks gained on June 25 as Brent crude fell below $73 per barrel, easing concerns over input costs. IndiGo surged on expectations of lower aviation fuel expenses, while BPCL, HPCL, and IOC benefited from improving refining and marketing margins. Tyre, paint, and specialty chemical companies also remained in focus due to potential raw material cost savings. Investors are closely monitoring US-Iran developments and crude oil supply trends for further market direction.
The dramatic drop in the price of crude oil internationally helped to lift spirits among several industry groups sensitive to oil prices on June 25, with stocks in the airline sector and oil marketing firms among the major gainers. The international price of Brent crude declined to below pre-US-Iran conflict levels, suffering losses in its fourth straight session and setting up expectations of reduced input costs in some Indian industries.
Brent crude declined below $72.48 per barrel, falling below the pre-US-Iran conflict level, while West Texas Intermediate (WTI) was trading around $69 per barrel. The drop follows a period in which the price of crude wiped out all gains achieved when geopolitical tension peaked in the Middle East. The price of Brent crude also fell below $73 per barrel for the first time since February 27, 2026.
US-Iran Talks Improve Supply Outlook
The decrease in oil prices comes on the heels of positive developments in peace talks between the US and Iran that have relieved worries about supply shortages. An increase in crude shipments via the Strait of Hormuz, along with an increase in supply offers from producers in the Middle East and Africa regions, has created a situation in which market participants are moving away from worries about shortages to an abundance of supply. This is shown by the contango of the Brent curve.
IndiGo Rallies on Lower Fuel Cost Expectations
One of the major sectors to benefit from the trend was the aviation sector. Stock prices of InterGlobe Aviation, which is the parent company of IndiGo, rose due to cheaper crude prices that would possibly lead to ATF cost cuts. The stock first gained 2.3% to ₹5,328 and then jumped as high as 4.49% to ₹5,443 on the day. Given that fuel cost constitutes the major portion of operational cost of the airline industry, cheap ATF would increase their profitability.
BPCL, HPCL and IOC Benefit from Softer Crude
The oil marketing firms too got their share of attention from the investors. BPCL was up 1% to ₹318.75, whereas HPCL increased by 0.9% to ₹416.85. IOC was up 0.1% to ₹146.47. Falling crude prices would result in falling costs for purchasing raw materials, thereby helping increase margins in marketing, especially if the retail prices of fuel remain unchanged. Besides, falling inventory costs would help in reducing working capital requirements for refiners.
Paint Sector Stands to Gain
A fall in the prices of crude oil is also favorable for industries whose operations require inputs made out of petroleum. The price of Asian Paints, which manufactures paints using petroleum derivatives, was ₹2,661.40, showing a decline of 0.2%. Asian Paints still continues to be one of the most significant beneficiaries of the decline in input costs.
Tyre and Specialty Chemical Stocks in Focus
Tyre producers like MRF and Apollo Tyres will undoubtedly benefit from cheaper costs associated with synthetic rubber, carbon black, and nylon tyre cord, all of which are derivatives of petrochemicals. The same is true for special chemical and plastics producers who will benefit from cheaper raw materials. Supreme Industries is one of those businesses that have been closely watched.
What Investors Should Watch Next
There have been major changes in the market story in just a few weeks. According to Carolyn Kissane, who is the Associate Dean of New York University’s Center for Global Affairs, the high supply expectations and the weak demand expectations led to the steep drop in crude oil prices. Looking ahead, market participants will watch out for events in the Middle East region, particularly the transit of oil through the Strait of Hormuz and the ongoing talks between the United States and Iran.
