M Financial Warns Middle East Escalation Could Hit LNG Flows, Trim Indian Port Volumes

Escalating tensions in West Asia and potential supply disruptions in the Red Sea–Persian Gulf corridor could weigh on Indian port and logistics performance in the near term, with liquefied natural gas (LNG) shipments particularly vulnerable, brokerage JM Financial has cautioned.​

In a note on the ports and logistics sector, JM Financial said LNG cargoes “may bear the brunt” if flows through the Strait of Hormuz are interrupted, while crude oil imports could be realigned if Indian refiners switch to alternative suppliers such as the US, Africa or South America. Any such realignment and routing changes could dent cargo volumes at Indian ports in March 2026, even as container volumes to the Middle East continue to feel the impact of carrier diversions and port disruptions.

Channel checks by the brokerage indicate that shipping lines are already seeking to bypass Hormuz by routing via Khor Fakkan, Fujairah and Salalah, and that India is exploring diversification of LPG imports to suppliers like the US and Oman. For Adani Ports’ Mundra terminal, around 15% of annual container volumes—about 1.3–1.4 million TEUs—are Middle East‑linked, implying a possible 3–4% impact on monthly volumes if disruptions persist, though the cumulative hit may be limited to roughly 1% if the crisis does not extend beyond three months, JM Financial estimated.​

On the gas side, analysts noted that India sourced about half its LPG imports in 2025 from Qatar, Kuwait and Saudi Arabia, and has already signed deals to import about 2.2 million tonnes of LPG per year from the US from 2026, equivalent to around 10% of annual needs. Post‑conflict price moves suggest LNG is under greater stress than LPG, with regional LNG prices up around 40% versus a 17% rise in propane and butane, which could widen the LNG‑LPG spread and support margins for firms like Aegis Logistics, similar to patterns seen during the Russia–Ukraine war.