India’s petrochemical market was in flux on July 30 after the US government announced sanctions against five Indian entities trading Iranian petroleum products, with methanol the worst hit, as per Chemweek.India imports between 3 million and 3.2 million metric tons (MMt) of methanol annually, about half of which comes from Iran. Market sources told Platts, part of S&P Global Commodity Insights, that imports from Iran typically range between 100,000 metric tons per month and 170,000 metric tons per month, depending on availability.
The US State Department said July 30 it would impose sanctions on 20 entities involved in trading Iranian oil and petchem products. Among them, four Indian entities were said to be engaged in Iranian methanol trading: Ramniklal S Gosalia and Co., Jupiter Dye Chem Pvt. Ltd., Global Industrial Chemicals Ltd. and Persistent Petrochem Pvt. Ltd.Trade sources described the sanctions as “highly unexpected,” prompting traders to reconsider dealings in Iranian methanol.“We have directed our sales team to stop selling any methanol in the domestic Indian market and to not deal in any Iranian products for now. We are trying to understand the magnitude of damage this event would cause to the Indian market,” an importer said on July 31.
“The sanctioned companies cannot transact in US dollar, so foreign banks will likely cease business with them,” a trader said. “Nobody will touch Iranian methanol cargoes, and others could be added to the list.”Market participants said they were still assessing whether the sanctions would hamper the flow of methanol cargoes that have already been booked. One of the companies listed under sanctions is among the top three Indian methanol importers, so the news has shaken the market as a whole, a market participant said.
“One of the exporters discharging a methanol cargo for an Indian trading firm in the sanctions list canceled its order immediately after the news early on July 31,” a market source said. The exact details about the cargo, however, could not be confirmed.Some traders were heard rushing to settle trades or transactions done for petrochemical products with the sanctioned companies.The sanctions freeze the listed entities’ US-based assets and bar American citizens and businesses from doing business with them.
Market sources said chemical companies involved in trading with these entities could also face risks.“This is a major blow to the Indian petrochemical industry. For now, everything should be on hold,” an Asia-based acetic acid supplier said. Two of the sanctioned entities are major acetic acid players in the Indian market and were handling a significant share of India’s total chemicals imports, a market source said.
Data from market sources showed that India’s Kandla port imported around 180,000 metric tons of methanol from Iran in July.According to data from S&P Global Market Intelligence’s Global Trade Atlas, Iran exported about 2.3 MMt of methanol in the first half of 2025, with China as its largest buyer at 1.3 MMt, followed by India at 261,815 metric tons.Domestic market reacts to the buzz. While no firm methanol bids, offers or trades were heard on July 31, key traders and importers waited cautiously to assess the overall market impact. Prices spiked in the domestic market amid concerns over disrupted Iranian supply.“The complete methanol market would be in chaos,” a methanol importer said, adding that ex-tank discussions spiked to the 27-28 Indian rupees per kg range as a ripple effect on July 31.Platts assessed India’s domestic ex-tank methanol at 24.36 rupees per kg, under offers at 24.50 per kg on July 30.“The market is facing the double whammy of the US tariffs and sanctions.
A weak Indian rupee is adding to economic woes,” said a market source. The Indian rupee fell to hit a five-month low at 87.56 against the US dollar on July 31 at the levels last seen during February 2025, Platts data showed.Some importers were seen keen to buy non-sanctioned methanol cargoes, said a Middle East seller. Meanwhile, downstream buyers were worried over thinning margins if a sharp spike in methanol prices was triggered by the move.
“The domestic price is set to shoot up after the news, and while there is no concern about the origin of the cargo in domestic buying and selling activity, the real question was whether end users would be able to digest the spike in feedstock cost,” a formaldehyde producer said.Platts assessed CFR India methanol at $270 per metric ton, up $8 per metric ton day over day on July 31, while India’s domestic methanol ex-tank Kandla price for 0-15 days forward delivery was assessed at 27.80 rupees per kg, up by 3.44 rupees per kg day over day.
Source: Reuters