West Asia Crisis Forces India to Curb Fertiliser and Petrochemical Production, Morgan Stanley Warns

The ongoing West Asia crisis has triggered significant disruptions to global energy supply chains.

“✕ Home News Analysis Agro-Forestry Art & Culture Technology Economy & Business Education Energy & Extractives Politics Law & Governance Health Science & Environment Social & Gender Sports Transport Urban Development WASH Research LogIn/SignUp Close the sidebar India's Crude Supply Resilience Amid West Asia Unrest Morgan Stanley reports that while the West Asia crisis could disrupt India's oil supply chain via the Strait of Hormuz, diversified sourcing and inventories are expected to cushion immediate impacts”

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The Strait of Hormuz disruption is severely impacting Asia's fertiliser, chemicals, and manufacturing sectors.

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According to Morgan Stanley's analysis, the crisis is testing the resilience of Asia's energy-linked value chains.

Asia imports substantial portions of its energy requirements from West Asia.

The report highlights that Asia imports about a quarter of its energy needs in the form of crude oil, LNG, and propane.

The Middle East serves as a major fertiliser producer and trade hub.

The Middle East supplies approximately 14 per cent of Asia's fertiliser needs.

This heavy dependence has made Asian economies particularly vulnerable to prolonged disruptions in the region.

India's industrial production is beginning to feel the direct impact of the West Asia crisis.

Multiple sectors are experiencing curtailments due to disrupted feedstock availability.

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Morgan Stanley's report indicates that approximately 25 million tonnes per annum (mntpa) of petrochemical capacity across Asia is seeing varying degrees of production cuts.

Around 10 million tonnes of fertiliser capacity is being impacted across Asia.

The crisis has specifically affected countries including South Korea, Taiwan, Thailand, and India.

Companies have been forced to reduce operating rates or shut units entirely.

Shortages of key petrochemical feedstocks such as propane and naphtha are causing these production cuts.

The chemicals sector has been particularly hard hit by these supply constraints.

Fertiliser production in India has been severely affected by the ongoing crisis.

“✕ Home News Analysis Agro-Forestry Art & Culture Technology Economy & Business Education Energy & Extractives Politics Law & Governance Health Science & Environment Social & Gender Sports Transport Urban Development WASH Research LogIn/SignUp Close the sidebar India's Crude Supply Resilience Amid West Asia Unrest Morgan Stanley reports that while the West Asia crisis could disrupt India's oil supply chain via the Strait of Hormuz, diversified sourcing and inventories are expected to cushion immediate impacts”

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Approximately 10 million tonnes of production capacity is impacted by limited feedstock availability.

The Morgan Stanley report highlights that India is actively seeking alternative urea sources.

Various nitrogen plants have reduced operating rates or curtailed operations globally.

These cutbacks are equivalent to over 5.5 million tonnes or 4 per cent of global effective urea production annually.

The disruption has created significant challenges for India's agricultural sector.

India's agricultural sector depends heavily on fertiliser inputs to maintain crop yields.

The situation threatens food security in the region.

The West Asia crisis has triggered significant price increases in downstream petrochemical products.

Downstream polymer and intermediate prices have risen by 15-25 per cent in the last two weeks.

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This reflects tighter supplies and companies prioritizing domestic demand.

The price surge is creating additional economic pressures on manufacturers.

Consumers may face higher costs due to these price increases.

The situation is particularly concerning for energy-intensive industries.

Fertilisers, chemicals, and petrochemicals are struggling with production curtailments.

These industries face additional economic pressures from rising costs.

India has implemented strategic diversification measures to mitigate the crisis impact.

“✕ Home News Analysis Agro-Forestry Art & Culture Technology Economy & Business Education Energy & Extractives Politics Law & Governance Health Science & Environment Social & Gender Sports Transport Urban Development WASH Research LogIn/SignUp Close the sidebar India's Crude Supply Resilience Amid West Asia Unrest Morgan Stanley reports that while the West Asia crisis could disrupt India's oil supply chain via the Strait of Hormuz, diversified sourcing and inventories are expected to cushion immediate impacts”

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The country has increased imports of discounted Russian oil to compensate for disrupted supplies.

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India is engaging in discussions with Iran to ensure safe passage for tankers.

This strategic approach aims to maintain energy security and industrial production.

Market analysts believe this combined with existing reserves should ease short-term concerns.

Morgan Stanley warns that crisis duration will be critical for long-term disruption scale.

Energy-intensive industries will be particularly affected by prolonged disruptions.

The situation remains uncertain as the West Asia crisis continues to evolve.