India's Methanol Price Doubles Amidst West Asia Conflict Disruptions

India’s landed methanol price more than doubled to an average $569 per tonne in the first quarter of FY27, up 114% year-on-year, as the West Asia conflict disrupted Gulf production, raised shipping costs and forced buyers to tap alternative suppliers. “The conflict in West Asia has compelled India to progressively reduce its dependence on the larger Middle East region for methanol,” Crisil Intelligence said in a report. The Middle East’s share in India’s methanol imports dropped to around 51% during March-May 2026, from nearly 88% between April 2025 and February 2026. The shift is significant because India imports about 98% of its domestic requirement, with shipments totalling nearly 3,570 kilo tonnes last fiscal. Methanol is a key input for the automotive, construction, chemical and pharmaceutical industries, exposing domestic consumers to overseas supply disruptions and price volatility. Saudi Arabia’s share fell to 6% in March from 34% in February and dropped to zero in May, against about 22% in May 2025. Oman partly offset the loss, with its supplies rising 95% month-on-month in March as shipments from its export terminal do not cross the Strait of Hormuz . India widened sourcing to China, Venezuela, Malaysia, Russia, Japan and Algeria. China supplied around 12% of India’s requirement in April and 26% in May, supported by its coal-based production and stable domestic coal prices. Venezuela accounted for nearly 14% of May imports. The diversification could not prevent a sharp contraction in availability. Middle Eastern shipments declined 69% year-on-year in April and 82% in May, while India’s overall imports fell 43% and 63%, respectively. The region’s share dropped to 54% in April from 100% a year earlier and to 46% in May from 97%. More than 4.5 million tonnes of global methanol output was estimated to have been affected by end-May after Gulf producers curtailed production and leading suppliers declared force majeure. Hormuz handles roughly one-third of global seaborne methanol trade, while shipowners avoiding the passage pushed up freight and war-risk insurance costs. CFR India prices rose 130% year-on-year in April and 141% in May. Domestic prices surged 182% to ₹73,950 per tonne in May. Crisil expects them to remain elevated at $380-420 per tonne in FY27. “The sustainability of the current price levels will largely depend on the geopolitical situation and the pace of normalisation of methanol supply,” the report said. India’s structural dependence has deepened as cheaper imports forced most domestic manufacturers to reduce operations or shut plants. “Currently, only one major domestic methanol producer is operational,” Crisil said. The Centre temporarily waived tariffs on methanol and 40 critical petrochemical products. Its ₹37,500-crore coal and lignite gasification programme, alongside green methanol and e-methanol investments, seeks to expand domestic capacity and reduce exposure to future shocks.