Asian Paints’ shares witnessed a significant rally, climbing nearly 5 percent to Rs 2,267, marking their highest level in three years. The surge came on the back of a broader market rally, fueled by a sharp decline in global crude oil prices. The recent dip in crude oil rates has bolstered investor sentiment, especially for industries like paint manufacturing that benefit from lower raw material costs.
Read more: Oil Stocks Rally as Brent Crude Drops Below $70: BPCL, HPCL, IOC, ONGC, and Oil India in Focus
Crude Oil Prices Hit Multi-Year Lows
Crude oil prices have plummeted in recent sessions, driven by increasing supplies, swelling U.S. inventories, and heightened trade tensions. Brent crude futures have dropped 6.5 percent over the last four sessions, settling at $68.34 per barrel, the lowest since December 2021. Similarly, WTI crude futures declined 5.8 percent, hitting $65.22 per barrel—levels not seen since May 2023.
Impact on Paint Industry
India, which imports nearly 85 percent of its crude oil requirements, stands to benefit from this price slump. Paint manufacturers like Asian Paints rely heavily on crude derivatives for raw materials, making the price drop a positive development for their input costs. Lower input prices directly improve gross margins and profitability, potentially enabling companies to offer more competitive pricing to consumers.
OPEC+ Production Cuts and Geopolitical Influence
The drop in oil prices stems from supply-demand imbalances, with OPEC+ announcing plans to gradually unwind voluntary production cuts. The group is set to reverse a 2.2 million barrels per day cut between April 2025 and September 2026, adding approximately 138,000 barrels per day to the global supply each month. This decision, along with Kazakhstan’s ongoing overproduction, has contributed to the downward pressure on crude prices.
Analysts suggest geopolitical factors are also influencing the oil market. Domestic brokerage JM Financial speculates that pressure from the U.S. administration to rein in oil prices may have played a role in OPEC+’s decision. Despite the current price slump, Brent crude is expected to find support around $70 per barrel, as a sharper decline could impact U.S. shale investment and strain Saudi Arabia’s fiscal balance.
Global Trade Tensions and Future Outlook
The global energy market is further grappling with escalating U.S.-China trade tensions, which could dampen Chinese crude demand—one of the largest drivers of global oil consumption. If the tensions persist, oil prices may face additional downward pressure, creating further advantages for crude-dependent sectors like the paint industry.
Asian Paints Share Price Performance
As of 2:34 pm, Asian Paints’ shares were trading at Rs 2,263.30 on the NSE, up 4.52 percent from the previous close. The company’s stock has remained relatively flat since the beginning of the year, reflecting a modest decline of 0.67 percent year-to-date. The recent surge highlights the positive correlation between crude oil price movements and the performance of companies reliant on crude-based raw materials.