US-Israel-Iran Conflict: Strait of Hormuz Disruption to Hit 15 Vulnerable Stocks, Analysts Warn

US-Israel-Iran War Disrupts Global Logistics Supply Chain

The joint attack by the US and Israel on Iran has disrupted the logistics supply chain in the Strait of Hormuz, a critical waterway for global oil trade. Approximately 20% of global oil passes through this shipping chokepoint, with India importing nearly 90% of its crude oil, 50% of which comes through the Strait of Hormuz.

Market Impact

Stock market experts believe that the disruption in the Strait of Hormuz will not be limited to oil and energy. The US-Israel-Iran war is expected to affect fertiliser, chemical, logistics, tyre manufacturer, and road transport companies in India. Aviation and oil marketing companies will be the most affected among these segments.

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Sector-wise Impact

• Aviation: Companies such as IndiGo and Air India are expected to be significantly impacted due to the disruption in the Strait of Hormuz.
• Oil Marketing Companies: IOCL, BPCL, and HPCL will face inventory loss and margin compression due to the disruption.
• Fertilisers: Indian fertiliser companies such as Chambal Fertilisers, IFFCO, and Paradip Phosphates will face severe margin pressure due to high raw material costs and demand-supply constraints.
• Paints and Chemicals: Companies such as Asian Paints, Pidilite, and Deepak Nitrite will face severe margin pressure from rising naphtha costs imported from the US.
• Logistics: Companies such as Alcargo Logistics, Bluedart Express, TCI Express, and Adani Ports & SEZ will face disruption in the supply chain due to the conflict.

Market Experts' Views

• Madhavi Arora, Chief Economist at Emkay, believes that rising tensions in the Middle East raise the risk of shipping disruptions and higher global freight and insurance costs.
• Seema Srivastava, Senior Research Analyst at SMC Global Securities, highlights the significance of the Strait of Hormuz and its impact on India's energy security, trade routes, and economic growth.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Key Figures

• 20%: Percentage of global oil that passes through the Strait of Hormuz.
• 90%: Percentage of crude oil imported by India.
• 50%: Percentage of crude oil imports by India that come through the Strait of Hormuz.
• ₹0.52/litre: Estimated impact of a $1/bbl increase in Brent on diesel prices.
• ₹0.55/litre: Estimated impact of a $1/bbl increase in Brent on petrol retail prices.