Global crude oil markets entered a period of acute volatility in early 2026, driven by escalating tensions around the Strait of Hormuz — the world’s most critical maritime chokepoint through which approximately 21 million barrels of oil pass daily, representing roughly 21 percent of global oil consumption, according to the International Energy Agency. The direct consequence for Indian paint manufacturers is a structural rise in crude-linked raw material costs — solvents, thinners, and plasticisers that cannot be hedged easily or over short to medium timelines.
Crude-linked feedstocks account for approximately 30 to 55 percent of the total cost of production in a standard decorative paint formulation. For every 10 percent rise in crude prices, raw material costs for a typical paint manufacturer increase by 5 to 6 percent. Collectively, Asian Paints, Berger Paints, Kansai Nerolac, Indigo Paints, and Birla Opus have all implemented three rounds of price increases in FY2026. Despite these increases, gross margins across the sector have compressed, as the speed of input cost increases has outpaced the ability to raise prices in a competitive retail environment.
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