JM Financial Flags Risks For Port Logistics Amid West Asia Tensions

JM Financial warned that escalation of the US–Israel and Iran conflict and the risk of disruption in the Red Sea and Persian Gulf could affect Indian port logistics. The brokerage said liquefied natural gas shipments may be particularly exposed while crude oil imports could be realigned if refiners source oil from alternative suppliers. Container volumes to the Middle East may be impacted but major Indian hubs could see limited fallout.\n\nChannel checks showed shipping companies are seeking routes that avoid the Strait of Hormuz, including Fujairah and Salalah. Mundra handles nearly nine million (mn) TEUs annually, with about 15 per cent linked to the Middle East, around one point three to one point four mn TEUs and a potential three to four per cent hit to Adani Ports' monthly volumes. The brokerage said if the conflict runs beyond three months cumulative effects may remain modest.\n\nFujairah has been used to bypass the Strait but was hit by drone strikes that damaged tankage at JSW Infra, and Iran has not ruled out a blockade, prompting consideration of pipeline or transhipment alternatives. Rerouting may reduce the impact but is unlikely to fully offset a significant blockade.\n\nThe Habshan–Fujairah crude pipeline has capacity of one point five mn barrels per day and Saudi volumes could flow via the East–West pipeline to Yanbu with five mn barrels per day. Routing via the Cape of Good Hope would increase transit times to the US and Europe by ten to fifteen days, reduce shipping capacity and raise costs.\n\nIndia sourced around 50 per cent of its LPG imports in CY25 from Gulf suppliers and has sought alternatives, including oil marketing companies agreeing to import about two point two million (mn) tonnes (t) of LPG from the US from CY26, equal to ten per cent of imports. JM Financial said supply disruptions in the Gulf have pushed LNG prices up around 40 per cent versus 17 per cent for propane and butane, and that aluminium, fertiliser and iron ore pellet trade could be affected, benefiting eastern ports.

Related Stories