Oil crisis to send shockwaves across key sectors in Asia: Morgan Stanley

New Delhi: The rise in global crude oil prices amid the West Asia conflict has the possibility to have knock-on effects on various other sectors in Asia, including India, according to a report by Morgan Stanley.

Morgan Stanley has put out a report highlighting the key sectors which could be hit by supply disruptions and potential knock-on effects.

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"As the days of supply disruptions drag on, we could see more sectors getting affected: Non-linear effects could kick in related to production and exports across Asia," said the report.

The rise in oil prices, if sustained, will take Asia's oil burden from below to above its 10-year average.

But beyond the rise in oil prices, Morgan Stanley said it is more concerned about potential disruption risks to supply quantities getting curtailed in the case of LNG.

India, Thailand, Korea, and Taiwan, it said, are the economies which are most exposed on this front.

"We also highlight fertilisers, propane, select petchems like butadiene, helium, and sulphur materials/inputs whose supply could be hit, with knock-on effects on various industries - e.g., agriculture, manufacturing of semis and autos, and select consumer industries," it read.

On the energy front, there have been some signs of disruption.

For instance, Morgan Stanley cited India having announced rationing of LNG and hiked LPG prices. Korea will impose price caps, lower fuel taxes, and extend subsidies on diesel. Thailand has asked civil servants to work from home. The Philippines implemented a four-day work week for government officials.

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"For most other economies, fuel prices have been adjusting upwards per their respective mechanisms. Refiners in select economies have still seen cuts in utilisation rates to conserve fuel reserves. India, China and Thailand are curbing exports of fuel products. We expect that there will be more areas of disruption to production and exports in the coming days and weeks if the geopolitical tensions drag on," it noted.

Signs of disruption across various industries and high-frequency data on trade, like Korea's 10-day exports trend, monthly PMI, industrial production and exports for the month of March, are key monitorables going ahead, according to Morgan Stanley.