Qatar’s state oil giant QatarEnergy said Iranian missile attacks on Ras Laffan, which houses the country’s core LNG processing operations, caused “extensive damage”, while the UAE shut gas facilities after intercepting missiles early on Thursday. US President Donald Trump, meanwhile, warned Iran not to attack Qatari LNG facilities again and threatened to “massively blow up the entirety of the South Pars Gas Field” if it did so. He said Israel had attacked South Pars without informing Qatar or the United States.
The sharp rally in oil prices began earlier in March after Iran effectively shut the Strait of Hormuz for traffic, attacking ships attempting to pass through. Later, Brent crude eased slightly, although it remained above the key $100 mark, after some ships were allowed transit through the critical waterway. However, the latest hostilities have again fuelled the rally.
Paint and tyre companies use crude oil as a key raw material, and rising oil prices can pressure their margins. For airlines, higher crude prices translate into increased aviation fuel costs. These stocks had seen a significant decline earlier this month after oil prices crossed the $100 mark for the first time since Russia’s invasion of Ukraine in 2022.
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Asian Paints shares have fallen more than 3% to trade at Rs 2,192.6 apiece on Thursday. Indigo Paints and Berger Paints shares declined around 2% each. Tyre makers MRF and Apollo Tyres saw their share prices fall around 2% each. IndiGo and SpiceJet shares, meanwhile, declined 3% to 4%.
“The uncertainty surrounding the war has worsened with Israel hitting the world’s largest LNG refinery in Iran. Brent crude has surged to $111. This is bad news for oil and gas importers like India. If Brent remains above $110 for an extended period, it will have negative implications for India’s macroeconomic indicators. India’s GDP growth and corporate earnings in FY27, too, will be impacted. However, this scenario may not persist in a fast-changing environment. A prolonged war is in no one’s interest. Therefore, a sudden end to the war bringing crude prices sharply down cannot be ruled out,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
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