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Several independent analysts have warned that disruptions to the global petrochemical supply chain caused by the ongoing conflict in the Middle East are only just beginning. The war has inflicted more severe damage on the international petrochemical sector than any similar event in recent history. Even if a lasting ceasefire is achieved, prices are unlikely to revert to pre-conflict levels in the short term, experts have stated.
In late February, Iran sealed off the Strait of Hormuz, a critical route through which approximately 20% of the world’s oil is transported. This move came after airstrikes by the United States and Israel targeted Iran’s energy infrastructure. With negotiations failing to produce a ceasefire, U.S. President Donald Trump announced a blockade on Iran starting the following day, causing West Texas Intermediate crude prices to jump by 8% at market open.
The combined impact of the conflict and the blockade of the Strait of Hormuz could surpass all previous crises in terms of scope, scale, and the range of affected commodities, according to industry expert Zhou Ying. She added, “Compared to the two oil crises of the 1970s, today’s global petrochemical capacity is much larger, supply chains are more integrated, and regional interdependence is tighter; consequently, the disruptions are triggering a much wider supply gap and affecting a broader array of products. Asia has been hit particularly hard.”
Data from the United Nations Conference on Trade and Development shows that daily vessel traffic through the Strait of Hormuz plummeted roughly 95%, dropping from around 130 ships in February to just six ships in March. Meanwhile, methanol prices across Asian markets surged between 68% and 141% in the first week of April compared to late February, with some markets hitting record highs.
Yu Ting highlighted that polyethylene prices should be closely monitored alongside crude oil. “The Middle East is one of the world’s largest exporters of polyethylene, and the Strait of Hormuz is the main shipping route for producers in Saudi Arabia, Qatar, Kuwait, and other regions. Although alternative routes through Oman and other ports have been developed, shipping costs are significantly higher,” she explained. She also predicted that the ongoing conflict will hasten a restructuring of global chemical capacities and trade flows, while fueling rapid growth in industries related to renewable energy.
The conflict has damaged QatarEnergy’s liquefied natural gas trains RasGas 2 Train 4 and RasGas 3 Train 6, with repair timelines estimated at three to five years, resulting in a recurring LNG supply shortfall of 12.8 million tons annually, according to Xu Fei. “Global natural gas fundamentals have shifted from a surplus to a tight balance, making prices more likely to decline gradually rather than bounce back quickly,” Xu added.
Even if tensions in the Middle East ease in the second quarter and traffic through the Strait of Hormuz resumes, average prices of crude oil and naphtha are expected to remain elevated due to the time needed for production and supply facilities to recover, noted Wang Yan. More than 60% of Asia’s naphtha imports, approximately 45% of liquefied petroleum gas imports, and about 60% of methanol imports flow through the Strait.
Several Asian nations—such as South Korea, Japan, Malaysia, and Vietnam—are experiencing immediate energy supply shocks. Many of these countries are revising their petrochemical feedstock import strategies, seeking to lock in long-term supplies from outside the Middle East.
Traditionally, Asia’s petrochemical producers have relied heavily on a single-source supply model from the Middle East, but this dependence may soon shift. The importance of diversifying feeds from the U.S., Russia, and Africa is expected to grow significantly. “While costs may be a bit higher, the concept of a ‘security premium’ will take hold,” cautioned Sun Lijia. He emphasized that geopolitical risks extend beyond supply concerns.
Prolonged uncertainty is likely to dampen downstream companies’ willingness to rebuild inventories and slow investment, which could delay the timing of demand recovery. “This impact doesn’t vanish once a conflict ends but can influence industry dynamics for much longer,” he added.
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