ET Intelligence Group: Escalating US-Iran conflict threatens to erode the profitability of Indian chemical manufacturers as surging crude oil prices drive up input costs and shipping delays add pressure on operations. India imports more than two-thirds of its methanol requirement, a major feedstock, from the Gulf countries. Methanol is used to make industrial intermediates such as formaldehyde, acetic acid, amines, and solvents. The supply disruption, therefore, has raised the risk of higher input costs.

India remains exposed to this conflict due to its dependency on Gulf countries and West Asia for its fertilisers and various petrochemicals. The country imported $3.6 billion worth of petroleum products (including LPG, Naphtha), $1.8 billion of polymers, and $1.7 billion of nitrogenous fertilisers from the GCC (Gulf Cooperation Council) and West Asia in FY25, according to Kotak Institutional Equities.

For most commodity chemical companies, raw material and solvent costs are tied to crude-linked derivatives such as naphtha, ethylene, benzene, propylene, methanol, styrene and vinyl chloride monomer. When crude oil prices rise, these feedstocks also become more expensive. Brent crude has jumped nearly 74% in 2026 so far.

Companies such as Deepak Nitrite, Finolex Industries, DCM Shriram, Supreme Petrochem, Styrenix, LG Polymers, GNFC, Balaji Amines, RCF, Chemplast Sanmar, Aarti Industries and Atul are expected to be impacted.

Rising tensions have also heightened risks across Gulf shipping routes, causing delays in consignments. Rerouting not only drives freight costs up but also adds war-risk insurance premiums, pushing up working capital needs for chemical companies.

According to ICICI Direct, a prolonged geopolitical logjam may lead to higher raw material and freight prices, which result in margin compression given the limited ability to pass costs to customers in a challenging environment.
According to Emkay Global Financial Services, major Asian refiners are rationalising existing output and may probably run at 20-30% lower production levels if the current situation persists. The fertiliser industry faces a double blow of tightening supplies of ammonia, DAP, and urea from the Gulf countries and the suspension of LNG output from Qatar. India relies on imports for nearly half of its LNG needs. With ammonia being a crucial feedstock for fertilisers, supply constraints may impact agrochemical producers, including Chambal Fertilisers, Deepak Fertilisers, and Gujarat Narmada Valley Fertilizers (GNFC).

Operator

Good afternoon, and welcome. Thank you for joining us to discuss Fluent’s Fourth Quarter and Year-End 2025 earnings results. With me today are Fluent’s Chief Executive Officer; Don Patrick, Chief Financial Officer; Ryan Perfit; and Chief Strategy Officer, Ryan Schulke.

Our call today will begin with comments from Don and Ryan Perfit, followed by a question-and-answer session. I would like to remind you that this call is being webcast live and recorded. Additionally, there is a slide presentation that accompanies today’s remarks, which can be accessed via the webcast and is also available on Fluent’s website. A replay of the event will also be made available following the call on Fluent’s website.

To access the webcast and slide presentation, please visit the Investor Relations page at www.fluentco.com. Before we begin, I would like to advise listeners that certain information discussed by management during this conference call will contain forward-looking statements covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Any forward-looking statements made during this call only speak as of the date hereof. Actual results could differ materially from those stated and implied by such forward-looking statements due to risks and uncertainties associated with the company’s business. These statements may be identified by words such as expects, plans, projects, could, will, estimates and other words of similar meaning. The company takes no obligation to update information provided on this call. For a discussion of the risks and uncertainties associated with Fluent’s business, we encourage you

ET Intelligence Group: Nifty 50 has fallen nearly 9% in 2026 amid fears that surging crude oil prices could weigh on the broader economy. Yet, an ETIG analysis of past instances of sharp oil spikes shows that equities typically recover within two months once crude prices begin to cool.

In July 2008, for instance, crude surged 27% in just two months to a record $147.5 a barrel during the Global Financial Crisis, dragging Nifty down 25%. Two months later, crude had eased 17%, and Nifty rebounded 12%.

A similar pattern emerged in October 2018. As crude rose 18% over two months on strong demand and geopolitical risks, Nifty slipped more than 4%. But over the next two months, the index stabilised while Brent prices collapsed nearly 39%.

The trend repeated in March 2022 when Russia-Ukraine conflict pushed Brent up 58% in two months and Nifty dropped 11%. Within the following two months, oil prices fell 20% and Nifty regained all lost ground, rising 11%.
Over a 25-year period, Nifty and Brent show a moderately positive correlation of 0.3. A periodic analysis, however, reveals that this relationship has shifted meaningfully over time. The coefficient has declined to around 0.38 since 2020 from 0.87 between 2000 and 2010, indicating a weakening linkage in recent years.

Crude’s impact extends beyond equities as higher prices affect input costs thereby affecting the broader economy. The Consumer Price Index shares a strong correlation of 0.64 with Brent, underscoring the effect of energy prices on inflation.
With Brent crude up 72% so far in 2026, the rise is set to increase energy and feedstock costs, potentially squeezing corporate margins and widening the fiscal deficit.

The federal budget deficit topped $1 trillion in the first five months of fiscal year 2026, as the U.S. government is on pace to record another massive deficit.

The nonpartisan Congressional Budget Office (CBO) reported that the federal budget deficit was just over $1 trillion through five months of fiscal year 2026, with the size of the deficit down $142 billion or 14% when compared with the same period in fiscal year 2025.

CBO noted that federal spending was just over $3.1 trillion in the first five months of fiscal year 2026, up $64 billion, or 2%, from the same period a year ago. Federal tax revenue collected jumped $206 billion, or 11%, when compared with last year and totaled nearly $2.1 trillion.

The rise in federal tax receipts was attributed to higher collections from individual income taxes and payroll taxes, with CBO noting those accounted for about two-thirds of the increase, while higher tariff rates also increased the amount of import taxes collected.

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CBO said that from October through February, individual income tax collections were up $99 billion, or 10%, when compared with the same period in the prior fiscal year, while payroll tax collections rose $34 billion, or 5%.

Customs duties, a category which includes tariffs, totaled $144 billion in the first five months of fiscal year 2026 – up $109 billion, or 308%, from the same period in the prior fiscal year. 

Some of those tariffs collected may ultimately be refunded to the businesses and individuals who paid them after the U.S. Supreme Court ruled that the Trump administration’s tariffs imposed under the International Economic Emergency Powers Act (IEEPA) were unconstitutional. 

Tariff refunds would lower federal tax revenue and thereby increase the deficit, and while the Trump administration has moved to implement replacement tariffs, those may face similar legal challenges and collections could face delays.

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Corporate income tax collections were down $33 billion, or 23%, in the first five months of the year due to provisions in the 2025 reconciliation bill that increased the tax deductions available to companies making certain eligible investments.

Federal spending increased the most for Social Security and Medicare, the mandatory spending programs that have seen enrollment surge in recent years amid the aging of America’s population.

Spending on Social Security totaled $676 billion in the first five months of fiscal year 2026 – an increase of $48 billion, or 8%, from the same period last year. CBO noted the annual cost-of-living adjustment boosted benefit amounts, while the Social Security Fairness Act’s expansion of benefits eligibility to previously non-covered professions accounted for about $7 billion of the increase.

Medicare spending jumped $34 billion, or 9%, from a year ago to a total of $475 billion in that period, which CBO attributed to higher enrollment and increased payment rates for services.

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Another significant mandatory program saw a similar rise in spending as outlays on Medicaid also increased by $22 billion, a rise of 8%, to a total of $285 billion in the five-month period.

Interest expenses on the national debt also saw a notable jump, with net interest costs totaling $433 billion in the first five months of the fiscal year. That’s a jump of $31 billion, or 8%, from the previous year and was due to the larger national debt and higher interest rates.

While spending on the Department of War rose $14 billion, or 4%, and the Department of Veterans Affairs increased $11 billion, or 7%, in the first five months of fiscal year 2026 compared with last year, several agencies saw notable decreases.

Spending by the Environmental Protection Agency (EPA) decreased by $20 billion, or 74%, though that decrease was due to a $20 billion expenditure in November and December 2024 under a clean energy grant program and no comparable outlay was made in 2025.

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A similar dynamic played out with the Department of Homeland Security, which saw spending decline by $12 billion, or 23%, due to a relative decrease in spending on disasters when compared with the prior year despite being partially offset by higher spending on immigration enforcement.

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