The global paints and coatings industry has been significantly impacted since late February 2026 due to escalating geopolitical tensions involving the United States, Israel, and Iran. The ongoing conflict has disrupted energy markets and key trade routes, creating widespread cost pressures and operational challenges across the sector.
One of the most immediate and critical impacts has been the sharp rise in crude oil prices. In early March 2026, Brent crude surged within the range of USD 80–120 per barrel, driven by heightened tensions around the Strait of Hormuz and disruptions in Middle Eastern oil supply. As nearly 40–60% of paint production costs are derived from petroleum-based inputs—such as resins, solvents, binders, and additives—this surge has directly increased manufacturing expenses for paint producers worldwide.
Rising Raw Material and Operating Costs
The increase in crude oil prices has led to significant inflation in key raw materials used in paint production. Essential inputs such as resins, binders, and solvents have witnessed sharp price increases. According to ChemAnalyst, several chemicals used in the paints and coatings value chain experienced price surges of up to 85% in Asian markets during March 2026. This spike was primarily driven by feedstock shortages and panic buying amid uncertainty. The graphs below illustrate the price trends of selected chemicals used in the paint and coatings sector.
In addition, rising energy costs have further increased operating expenses for manufacturers. Production processes in the paints and coatings industry are energy-intensive, and higher fuel and electricity costs have compounded the financial burden on producers. The conflict has caused European natural gas prices to surge, impacting energy-intensive manufacturing processes, including paint production.
Supply Chain Disruptions and Logistics Challenges
Supply chain disruptions have further intensified the crisis. The Strait of Hormuz, a critical global shipping route, has faced severe restrictions due to the conflict, leading to delays, higher freight costs, and increased insurance premiums. Major oil-producing nations in the Middle East—including Iraq, Saudi Arabia, and the UAE—have experienced reduced output as shipping activity slowed, further tightening global supply.
These disruptions have created uncertainty in raw material availability and extended delivery timelines. Paint manufacturers are facing challenges in maintaining consistent production schedules, while increased working capital requirements are straining financial resources.
Impact on India’s Building Materials Sector
The effects of the conflict are particularly evident in India’s building materials sector. Rising fuel prices and supply chain disruptions have impacted industries such as paints, cement, ceramics, steel, and glass. Increased logistics costs and energy price volatility have led to higher manufacturing expenses and production slowdowns.
Micro, Small, and Medium Enterprises (MSMEs) have been the most affected. Smaller paint manufacturers and related industries, which rely heavily on LPG and diesel, are facing severe cost pressures. Many have reduced production hours or temporarily halted operations due to the inability to absorb rising costs, further tightening market supply.
Industry-Wide Price Hikes
In response to mounting cost pressures, major paint manufacturers have initiated price increases. Asian Paints has announced a 6–8% price hike across its product portfolio, to be implemented in two phases on April 10 and April 21, 2026. The increase covers a wide range of products, including emulsions, enamels, primers, waterproofing solutions, and adhesives.
Similarly, Berger Paints has implemented multiple price hikes within a short period, with cumulative increases reaching up to 8.5%. Other industry players such as Dulux Paints, JSW Paints, and Birla Opus are also considering similar revisions.
Here is a breakdown of the announced and potential price increases by Berger Paints:
On the global front, Major chemical supplier BASF, which provides intermediates like neopentyl glycol for automotive coatings and industrial resins, has announced significant price increases (up to 30%) on its products in Europe, citing volatility in raw material prices and logistics.
Conclusion
The paints and coatings sector is currently navigating a highly challenging environment marked by rising input costs, supply chain disruptions, and uncertain demand conditions. The sharp increase in crude oil prices and the resulting inflation in raw materials have significantly strained manufacturers’ margins, forcing companies to implement price hikes to sustain profitability.
While large players are better positioned to absorb and pass on cost increases, smaller manufacturers—particularly MSMEs—face significant operational and financial risks. The cascading impact of the conflict on energy markets, logistics, and raw material supply continues to influence the entire value chain.
Looking ahead, the sector is expected to remain under pressure as long as geopolitical tensions persist. Any stabilization in crude oil prices or improvement in supply chain conditions could provide relief. However, in the near term, volatility is likely to continue, with pricing strategies, procurement planning, and cost management remaining critical for industry participants.
