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\n <\/a><\/p>\n\u201cOver half of the world\u2019s refineries are somehow impacted or influenced by this,\u201d said Kurt Barrow, vice president of oil, fuels, and chemicals research at S&P Global Energy. Among these are refineries in the Persian Gulf, some of which are under the direct threat of missile and drone strikes, as well as the 40% of refineries in the rest of the world that buy oil from the region. Such refineries make feedstocks such as naphtha for ethylene crackers or are integrated with petrochemical plants.<\/p>\n
Under normal circumstances, it takes 20 days for tankers from the Persian Gulf to reach destinations in Asia. The war has continued past that duration, and customers are missing deliveries. \u201cWe have a very long supply chain that has now dried up,\u201d Barrow said.<\/p>\n
Janet Kong, CEO of Hengli Petrochemical International, the Singapore-based trading arm of the Chinese giant Hengli Petrochemical, said refiners in Asia are already cutting output by 10\u201315%. \u201cThe US has a blessing of being an energy exporter,\u201d she said, and the crisis isn\u2019t fully reflected in its oil prices. \u201cEast of Suez, life has been very different.\u201d<\/p>\n
The war is also affecting petrochemical plants directly in the Middle East and indirectly in Asia. \u201cThe duration of the war is very important,\u201d said Walt Hart, vice president of global natural gas liquids research at S&P Global Energy. \u201cIf it drags out, we have a lot more problems that we face than if it ends quickly.\u201d<\/p>\n
Hart said that about 29 million metric tons (t) of ethylene capacity, out of a global total of 232 million t, is sitting directly in the conflict zone. Ethylene, one of the most important building blocks made in petrochemical plants, is used to make polyethylene and ethylene glycol, a precursor for polyester products.<\/p>\n
A big issue facing these facilities is that even if they are safe from missiles and drones, their output, such as bags of polyethylene, piles up quickly if their owners can\u2019t ship it out. \u201cI\u2019m asking myself, What level of inventory can I stack up and keep the operation running?,\u201d Mark Eramo, a special adviser for S&P Global, said on the sidelines of the conference.<\/p>\n
Dow, which operates joint ventures in Kuwait and Saudi Arabia, is contending with the storage problem, CEO Jim Fitterling said. \u201cWe are finding out things every day, second derivative effects of what\u2019s going on,\u201d he told the audience. \u201cWe want to run because taking everything completely down cold is not the best, but there\u2019s no place to put everything.\u201d<\/p>\n
Following the conference, Dow\u2019s massive Sadara petrochemical joint venture with Saudi Aramco in Saudi Arabia suspended operations because of supply chain disruptions.<\/p>\n
Ethylene capacity, S&P\u2019s Hart noted, has also been shut down in Iran, Kuwait, and Qatar. \u201cWe are seeing reductions to near minimum in the rest of the Persian Gulf countries.\u201d So far, he said, the industry has lost 15 million t of Middle Eastern production capacity on an annualized basis.<\/p>\n
On top of that, another 140 million t of capacity across Northeast Asia, Southeast Asia, and the Indian subcontinent is affected by the dwindling of feedstocks from the Middle East. Plants in those regions have throttled back production by 7\u20138 million t, Hart said. All together, the ethylene outages due to the war amount to 12% of global production.<\/p>\n
In addition, the market has lost 8 million t of annual ethylene glycol exports out of the Middle East. Even if other regions, such as the US and Canada, run their plants at maximum capacity, the market will still be short, and some customers will have to limit output. \u201cWe are going to see demand destruction,\u201d Hart said.<\/p>\n
Chemical prices are increasing. Jesse Tijerina, executive director of chemical consulting at S&P Global Energy, said variable costs to make polyethylene in Asia have doubled since the beginning of the war, and prices for polyethylene have increased 40\u201350%.<\/p>\n
The higher prices were not what executives expected for 2026. Fitterling pointed out that the market had been in a period of unprecedented overcapacity, and depressed prices, before the crisis. Now every company that can is producing as much as possible. Operating rates before the crisis were in the mid-70% range, Fitterling said. \u201cSuddenly everything\u2019s flat out.\u201d<\/p>\n
US petrochemical production, which is largely based on domestic natural gas and is at a cost advantage over Asian and European production even under normal circumstances, is in a position to ramp up. As long as demand remains steady, producers in North America, and even in Latin America, are \u201cpoised to benefit from this,\u201d Eramo said.<\/p>\n
John Moseley, chief commercial officer of Port Houston, told attendees that he has already seen an increase in exports, especially products, such as polyethylene, that are shipped in containers. \u201cWe have already seen an increase of 12% just in the last 2 weeks,\u201d he said. \u201cWe\u2019re going to see some huge increases going into Asia.\u201d<\/p>\n
In Europe, the conflict has pushed up production costs, said Anup Kothari, a BASF executive board member. On the other hand, the region is experiencing less pressure from imports, which had been a problem in recent years. \u201cPeople are not yet seeing the full effect, but everybody is expecting it,\u201d he said. \u201cSo far, actually, surprisingly, it is actually a net positive, even in Europe.\u201d<\/p>\n
Petrochemical makers are also considering what happens after the war, particularly regarding the shipping of products now trapped in the Persian Gulf. \u201cPetrochemicals are not going to be the first in the pecking order,\u201d Fitterling said. \u201cFertilizers, oil, and gas are going to get out first.\u201d<\/p>\n
Andrew Neale, global head of chemicals for S&P Global Energy, warned that the chemical industry will be ensnarled by supply chain issues. \u201cYou are going to have a big dislocation of containers around the world, which is going to take quarters instead of months to unwind,\u201d he said. \u201cWe need to look at what demand will do coming out of this. We have seen big swings post-COVID. I think we will see the same coming out of 2026.\u201d<\/p>\n
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<\/a><\/p>\n\n Chemical & Engineering News<\/p>\n
ISSN 0009-2347<\/p>\n
Copyright \u00a9
\n 2026 American Chemical Society<\/p>\n","protected":false},"excerpt":{"rendered":"\u00a0 Key Insights The Iran war has hampered chemical production in the Middle East and Asia. The situation…\n","protected":false},"author":2,"featured_media":48747,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26],"tags":[328,19947,102,34,39,4335,19948],"class_list":{"0":"post-48746","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-persian-gulf","8":"tag-business","9":"tag-ethylene","10":"tag-hormuz","11":"tag-iran","12":"tag-persian-gulf","13":"tag-petrochemicals","14":"tag-polyethylene"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116336229481056617","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/48746","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=48746"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/48746\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/48747"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=48746"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=48746"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=48746"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}