Impact of the West Asia Crisis on Industry

The impact of the West Asian conflict is clearly visible on Indian industry. According to companies associated with the logistics sector, around 40,000–45,000 Indian containers are currently either stuck in transit or stranded at international ports.

In addition, several contingency charges imposed by shipping companies have increased the cost per container by three to five times. Industry experts say that due to these factors, costs are continuously rising, which may lead to a container shortage crisis.

According to a freight forwarder, the cancellation of war-risk insurance cover by insurers has also become a major problem for the industry.

If the crisis continues for a longer period, there is a strong possibility that base freight rates will increase significantly.

However, the Government of India has assured companies that it is working on several plans to gradually address any shortage in LNG (Liquefied Natural Gas) supply from West Asia, so that production activities are not disrupted even if the war continues for a long time.

Regarding LNG, most of India’s 60% LNG imports come from Qatar, which has now stopped supply due to the war. Natural gas is cooled to convert it into LNG, which reduces its volume and makes it easier to transport over long distances. Once it reaches the ports, LNG is converted back into gas through a regasification process and then used in fertilizer, power generation, city gas distribution, and other industries.

Sources said that around 80% of the raw material used in urea production is natural gas. Any disruption in gas supply could seriously affect domestic urea production in India and increase dependence on imports.

Within a week of the crisis, urea prices in West Asia increased by about $100 per ton, reaching nearly $600 per ton.

• Crude oil prices have increased from $80 to $120 per barrel.
• The price of Rs 80 kg Phenol has increased by up to Rs 120Kg.
• The cost of face veneer has increased by about ₹2.

The ongoing conflict in West Asia has had a serious impact on industry. When a war breaks out in a nearby region, even countries not directly involved are affected.

According to industry experts, the year 2026 may be full of various global incidents and disruptions. Which will destabilize prices and thereby whole business.

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