Current Situation: Israel-Iran Conflict (June 2025...

Current Situation: Israel-Iran Conflict (June 2025) Tensions remain high between Israel and Iran, primarily over Iran’s nuclear program and Israel’s covert operations. Several limited military skirmishes and cyberattacks have occurred since April 2025, but a full-scale war has not erupted. Key incidents: Israeli strikes on suspected Iranian nuclear sites. Iranian-backed proxies (like Hezbollah) active near Israel’s borders. Increased drone activity in the Persian Gulf. 🛢️ Impact on Global Trade & Supply Chains Oil Prices Volatile: Brent crude has hovered between $90–$102 per barrel, making transport and energy-intensive chemical processes more expensive. Shipping Routes Risk: Straits of Hormuz security is fragile, impacting maritime freight insurance and timings. 🧪 Impact on Indian Chemical Industry 1. Raw Material Prices India imports significant chemical intermediates and feedstocks (like methanol, ammonia, solvents) from the Gulf and Iran. Due to geopolitical risks, prices have risen 8–15% since April 2025. Iranian exports are now routed indirectly (through UAE or Oman), increasing lead time and logistics costs. 2. Fertilizer Sector (Key Impact) India’s ammonium sulphate, urea, and potash segments are feeling the pinch due to disrupted Iranian supplies. Subsidy pressure has increased on the Indian government due to high import costs. 3. Specialty Chemicals Petrochemical-based ingredients like sodium acetate, sodium nitrate, and toluene derivatives are seeing fluctuating input costs. Exporters in India are gaining short-term opportunities due to supply gaps in Europe, but margins are under stress from raw material costs. 4. Iran Trade Disruption Indian traders sourcing from Bandar Abbas port or Iranian refineries face payment issues, due to sanctions and tighter banking scrutiny. The INSTC (International North-South Transport Corridor) has slowed, affecting Indian exporters to Central Asia via Iran. 📈 Opportunities for India Substitute Supplier Role: India is gaining traction as a backup supplier for certain intermediates to Europe and East Asia. Companies in Gujarat and Maharashtra are expanding output to fill regional gaps. Increased demand for local sourcing by Indian pharma and agrochemical companies. 📌 Summary Area Impact Raw Material Cost Rising (8–15%) Fertilizer Imports Delayed & expensive Exports Slight boost to EU/Asia Shipping Routes Risk-prone via Gulf Payment Channels Complex with Iran