West Asia tensions raise risks for trade, oil prices, Indian markets
The West Asia and North Africa region account for about 31% of India’s export-import cargo. If the situation worsens, cargo volumes at Indian ports could decline
- Mar 2, 2026,
- Updated Mar 2, 2026 11:30 AM IST
Rising tensions in West Asia are beginning to worry investors and businesses, as the conflict could disrupt global trade routes, push up crude oil prices and affect several sectors of the Indian economy. A recent research report by JM Financial Institutional Securities says the situation could have a meaningful impact if the disruption continues for a longer period.
According to the report, concerns have emerged around shipping routes such as the Strait of Hormuz and the Bab el‑Mandab Strait. Any disruption in these routes could increase freight rates and delay cargo movement. Some ports in the Middle East are also reportedly operating only partially after damage caused by the conflict.
This is important for India because the West Asia and North Africa region accounts for about 31% of India’s export-import cargo. If the situation worsens, cargo volumes at Indian ports could decline as shipping capacity falls and vessels skip certain ports.
Among companies, the report notes that JSW Infrastructure has direct exposure through its liquid terminal storage facility in Fujairah, which contributed about 13% of its FY25 EBITDA. Ports operator Adani Ports and Special Economic Zone may also see an impact if cargo volumes such as oil tankers, LNG shipments and containers passing through the Persian Gulf decline. LPG imports handled by Aegis Logistics could also be affected if disruptions push up LPG and propane prices.
The aviation sector may also face pressure. Analysts believe flight cancellations or airspace restrictions in the region could affect InterGlobe Aviation, which operates the IndiGo airline. The company is sensitive to fuel costs, and higher crude prices could hurt margins.
The broader risk for markets comes from rising oil prices. The conflict has already pushed Brent crude to around $72–73 per barrel, a seven-month high. Nearly 20% of global oil flows and more than 40% of India’s crude imports pass through the Strait of Hormuz. If the route faces prolonged disruption, oil prices could move above $90 per barrel and possibly even touch $100.
Higher oil prices would directly affect India’s economy. Estimates suggest that every $1 increase in crude oil raises India’s annual import bill by about $2 billion.
However, market experts advise investors not to panic. V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, says uncertainty from the West Asian conflict may keep markets volatile in the near term. But history shows that panic selling during geopolitical crises is usually the wrong strategy.
He believes investors should stay cautious but use market weakness to gradually accumulate quality stocks in sectors linked to domestic consumption, such as banking, automobiles, capital goods and defence.
Rising tensions in West Asia are beginning to worry investors and businesses, as the conflict could disrupt global trade routes, push up crude oil prices and affect several sectors of the Indian economy. A recent research report by JM Financial Institutional Securities says the situation could have a meaningful impact if the disruption continues for a longer period.
According to the report, concerns have emerged around shipping routes such as the Strait of Hormuz and the Bab el‑Mandab Strait. Any disruption in these routes could increase freight rates and delay cargo movement. Some ports in the Middle East are also reportedly operating only partially after damage caused by the conflict.
This is important for India because the West Asia and North Africa region accounts for about 31% of India’s export-import cargo. If the situation worsens, cargo volumes at Indian ports could decline as shipping capacity falls and vessels skip certain ports.
Among companies, the report notes that JSW Infrastructure has direct exposure through its liquid terminal storage facility in Fujairah, which contributed about 13% of its FY25 EBITDA. Ports operator Adani Ports and Special Economic Zone may also see an impact if cargo volumes such as oil tankers, LNG shipments and containers passing through the Persian Gulf decline. LPG imports handled by Aegis Logistics could also be affected if disruptions push up LPG and propane prices.
The aviation sector may also face pressure. Analysts believe flight cancellations or airspace restrictions in the region could affect InterGlobe Aviation, which operates the IndiGo airline. The company is sensitive to fuel costs, and higher crude prices could hurt margins.
The broader risk for markets comes from rising oil prices. The conflict has already pushed Brent crude to around $72–73 per barrel, a seven-month high. Nearly 20% of global oil flows and more than 40% of India’s crude imports pass through the Strait of Hormuz. If the route faces prolonged disruption, oil prices could move above $90 per barrel and possibly even touch $100.
Higher oil prices would directly affect India’s economy. Estimates suggest that every $1 increase in crude oil raises India’s annual import bill by about $2 billion.
However, market experts advise investors not to panic. V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, says uncertainty from the West Asian conflict may keep markets volatile in the near term. But history shows that panic selling during geopolitical crises is usually the wrong strategy.
He believes investors should stay cautious but use market weakness to gradually accumulate quality stocks in sectors linked to domestic consumption, such as banking, automobiles, capital goods and defence.