On February 28, military strikes launched by the United States and Israel against Iran have posed a serious threat to the production and supply of Middle Eastern crude oil, naphtha, and a range of petrochemical products. Market participants are concerned that the conflict could drag on, driving sharp price increases for related commodities; some markets have suspended quoting. South Korean petrochemical giant YNCC and Indonesian producer Chandra Asri have both declared force majeure, while numerous cracker units across Asia now face the risk of reduced operating rates or shutdowns.

The Strait of Hormuz handles roughly 20% of global crude oil trade, with over 80% of that flowing to Asian markets. The recent shutdown of the strait is a key factor disrupting petrochemical production in Asia, where buyers are highly dependent on Middle Eastern crude shipments passing through the waterway, making them particularly vulnerable. As of 5:00 p.m. Eastern Time on March 6, Brent crude had climbed to $92.87 per barrel. In response, Ajay, head of oil markets at ICIS, … · Palma stated that oil prices are likely to remain elevated over the coming days and weeks. Should the strait remain closed for an extended period, oil prices could surpass $100 per barrel.

Naphtha and liquefied petroleum gas (LPG) supplies are also under severe strain. Data from 2025 show that more than 60% of Asia’s seaborne naphtha imports rely on the Middle East, while roughly 45% of LPG imports must transit the Strait of Hormuz. A closure of the strait would directly plunge Asia’s cracker feedstock supply into crisis, swiftly shifting the region’s petrochemical market from structural oversupply to a severe naphtha shortage, with immediate repercussions for the operating rates of crackers and downstream facilities.

ICIS reports that refineries across several Asian countries are considering cutting operating rates, and naphtha shipment schedules for March–April may face a wave of cancellations, further constraining downstream production of paraxylene (PX) and other products. A shortage of feedstock has already prompted Indonesia’s Chandra Asri and South Korea’s YNCC to declare force majeure, forcing their steam crackers to operate at reduced capacity. If the Strait remains closed and Middle Eastern cargoes cannot transit, Asian naphtha inventories could be depleted within four weeks, compelling additional units to sharply curtail output or even shut down entirely. In fact, even before the conflict erupted, profit pressures had already led major Asian naphtha‑importing countries, including South Korea, to reduce cracker loads as early as February; and even if Asian refiners can produce naphtha domestically, they will struggle to close the gap given the inability to receive Middle Eastern crude.

Supply disruptions have driven up chemical prices across the board. Iran is the world’s second-largest methanol producer, and India has long been heavily reliant on Iranian methanol; following the conflict, spot prices for Indian methanol have surged. Although Southeast Asia has not directly experienced route interruptions, suppliers have suspended quoting and halted acceptance of new orders. Southeast Asian producers of polyethylene (PE) and polypropylene (PP) have ceased taking orders as of March 2. A shipment of Group I base oils from Iran to the United Arab Emirates is expected to be disrupted, while negotiations for April‑loaded methyl methacrylate (MMA) in Asia have stalled. Shipments of monoethylene glycol (MEG) from the Arabian Gulf to other parts of Asia have been suspended, and exports of polyethylene terephthalate (PET) to the Middle East have been halted. Freight rates for maleic anhydride (MA) shipments from Northeast Asia have risen sharply, with shipping lines imposing a surcharge on Middle Eastern routes. Meanwhile, market discussions for styrene monomer (SM) have ground to a halt due to uncertainty over how long the strait will remain closed.

According to Reuters, the escalating situation in the Middle East has led to the shutdown of local fertilizer plants and severe disruptions to shipping routes. With Asia currently in the critical period of preparing for spring planting of major food crops, the supply outlook for key fertilizer‑importing countries is increasingly precarious. Traders and importers note that supplies of nitrogen‑, phosphorus‑, and other fertilizers from India, Australia, and Indonesia could all come under pressure.

QatarEnergy’s natural gas feedstock supply has been disrupted following attacks on its liquefied natural gas (LNG) facilities, forcing the shutdown of its world‑largest single urea production unit. Meanwhile, sulfur output in other parts of the Middle East has also been cut. StoneX fertilizer analyst Josh. · Lin Wei pointed out that the conflict has effectively pushed Qatar, Iran, and Saudi Arabia—three of the world’s largest urea exporters and three of the largest anhydrous ammonia exporters—out of the global supply market, leading to a substantial contraction in global fertilizer supplies.

At present, more than 40% of India’s urea and phosphate fertilizer imports come from the Middle East. A recently signed procurement agreement for 1.3 million tonnes of urea plans to source part of its supply from the region, but there is now a risk that deliveries may not arrive on schedule. Industry executives in India report that, due to a sharp drop in Qatar’s LNG supplies, three domestic urea production units have already cut output, and in the short term, supplies of urea and diammonium phosphate are expected to tighten.

Even before the conflict erupted, the global fertilizer market was already tightening. Since the outbreak, urea prices have surged by roughly $80 per ton, from around $470. Sulfur supplies are critically scarce, with virtually no spot inventory available. Overall, as geopolitical tensions in the Middle East continue to escalate, disruptions to shipping through the Strait of Hormuz have spread from the energy sector to the entire petrochemical value chain, placing Asian petrochemical production, trade, and pricing under severe strain.

(Source: China Chemical News, March 9, 2026)