West Asia war: How Strait of Hormuz closure hurts Adani Ports, JSW Infra

Shares of Adani Ports, JSW Infra, GMR Airports fell on Monday as Iran blocks Strait of Hormuz. Analysts fear rising freight rates, and LNG, LPG costs may hurt imports and EXIM cargo

Iran-Israel-US war: Strait of Hormuz, Bab el-Mandab disruption impact explained

  The United States (US) and Israel's military actions against Iran in West Asia have raised fears of a significant disruption to global trade due to the closure of Strait of Hormuz – one of the most important Middle Easter routes to carry energy supplies and goods. 

Following the US and Israel’s joint military actions, Iran has indefinitely blocked the Strait of Hormuz route – a narrow passage connecting the Persian Gulf to the Arabian Sea. Further, reports suggest operations at the Bab el-Mandab strait at the southern end of the Red Sea has also been disrupted due to the war. 

The blockage of these two trade points, which handle a substantial share of global oil shipments and container traffic linking Asia, Europe and the Middle East, could likely push up freight charges and cargo shipment timings, fear analysts. 

For India, analysts at JM Financial Institutional Securities see immediate implications on players such as JSW Infra, Adani Ports, GMR Airports, Aegis Logistics, and Gujarat Pipavav Port. 

On the bourses, JSW Infrastructure share price slipped 4.7 per cent intraday, Adani Ports stock fell 4.6 per cent, GMR Airports shares declined 6.6 per cent, and Gujarat Pipavav shares 4.7 per cent.

How will closure of Strait of Hormuz,  Bab el-Mandab routes affect India?

A meaningful portion of the country’s external trade passes through these routes. The brokerage cautions that any prolonged closure or operational restrictions here could push up freight rates, delay cargo movement, and disrupt shipping schedules. 

“Indian exporters and importers may face longer transit times as vessels reroute around the Cape of Good Hope, increasing fuel consumption and insurance premiums. The uncertainty could also lead to ‘blank sailings’ and skipped port calls, hurting throughput at domestic ports,” it said in its latest report. 

As per the brokerage’s estimates, nearly a third (31 per cent) of India’s EXIM (export-import) cargo had exposure to the Middle East and North Africa (MENA) region as of FY25. 

“If trade flows slow or energy shipments are disrupted, port volumes in India could come under pressure. Higher freight costs may also dent trade competitiveness, particularly for bulk commodities and low-margin goods,” it said. 

In this backdrop, the brokerage has highlighted stocks in the ports and logistic sector that face operational risk due to their exposure in the conflicted regions: 

JSW Infrastructure: The JSW Group company has direct overseas exposure through its liquid storage terminal in Fujairah, located in the UAE. 

This asset, JM Financial said, earned Ebitda worth $36 million in FY25, translating to nearly 13 per cent of the company’s total FY25 Ebitda. 

Though much of the company’s cargo portfolio is domestically linked, any operational disruption or lower throughput at the Fujairah facility could weigh on profitability, it said. 

Separately, JSW Infra’s planned expansion in Oman also faces execution risks if regional instability persists. 

Adani Ports and Special Economic Zone (APSEZ): India’s largest private port operator, JM Financial said, could feel the impact through lower cargo volumes transiting from the Persian Gulf. Oil tankers, LNG carriers and container traffic linked to Gulf trade form a notable component of India’s EXIM mix, and Adani Ports accounted for 27 per cent of India’s cargo volumes last year. 

While its Israeli port (Haifa) exposure is relatively modest (1.5 per cent Ebitda contribution) in earnings terms, broader regional trade disruption could affect marine services operations and transshipment volumes. 

Its geographically diversified international assets, in places such as Tanzania and Australia, are less directly exposed to the conflict zone. 

GMR Airports: The brokerage thinks GMR Airports may see softer international passenger traffic if flights to and from the Gulf region are curtailed. The Middle East accounts for a sizeable share of India’s overseas travel flows. A decline in transit passengers, particularly at Delhi airport, could weigh on high-margin non-aeronautical revenues. 

Aegis Logistics: The liquefied petroleum gas (LPG) and other bulk liquids handler may be impacted if LPG imports slow due to higher prices or shipping bottlenecks. In FY25, the Middle East accounted for over 90 per cent of LPG imports with India importing close to 65 per cent of its LPG consumption. 

“Saudi CP prices for propane have already risen by $50/tonne CY26 to date. They could rise even further in the wake of the ongoing geopolitical conflict. This could adversely impact LPG demand growth in India by slowing the shift of economically weaker households to LPG from polluting fuels such as firewood or kerosene,” it said. 

The brokerage further added that the disruptions in West Asia could lift LNG prices (India imports significant LNG from Qatar). The demand from the industrial players, that had switched to propane (from PNG), could also take a hit. 

Gujarat Pipavav Port: This port operator could face volatility if services routed via the Red Sea are disrupted. Earlier episodes of unrest in the region had already led to temporary slowdowns in certain container services. A renewed and prolonged disruption may once again pressure volumes and inflate freight rates.  ============  Disclaimer: The views and investment tips expressed by the brokerage in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.