ICIS: Hormuz crisis tightens global plastics and chemical markets

In his latest insight here, Joe Chang, Global Editor, Chemical Business at ICIS, notes that while the US could redirect some exports to ease shortages, it would not be able to fully replace Middle Eastern supply. The broader concern is sustained high oil and gas prices, which could dampen demand and weigh on economic growth, particularly in Europe and Asia. ICIS expects Brent crude to rise towards US$90/bbl in March 2026, with a risk premium likely to remain even if tensions ease.

Key highlights:

• 84% of Middle East polyethylene capacity depends on the Strait of Hormuz for export access, underlining its role as a pivotal trade artery.
• More than 12.5 million t of PE, 14 million t of methanol and 6.5 million t of ethylene glycol were exported from the region in 2025, much of it bound for China, wider Asia, and the EU.
• Asia is especially exposed, sourcing around 80% of its seaborne naphtha from the Middle East, leaving crackers vulnerable to feedstock strain.
• European producers are already shifting from modest contract discussions to triple digit price targets amid tightening supply expectations.
• The US, which exports roughly half of its polyethylene output, could increase PE and EG shipments to Europe and Asia to help offset shortages.
• Even with additional US volumes, global markets would remain tight, heightening price volatility and increasing pressure on downstream margins.

Read the article online at: https://www.hydrocarbonengineering.com/petrochemicals/04032026/icis-hormuz-crisis-tightens-global-plastics-and-chemical-markets/