Middle East chemicals retain cost advantage despite Strait of Hormuz crisis

Middle Eastern petrochemical producers are set to keep their long-term cost advantage over other regions despite the ongoing war involving Iran and shipping disruptions in the Strait of Hormuz, Oilprice reported. Current industrial constraints in the Persian Gulf have led to near-term shifts in polymer sourcing. These supply chain adjustments are temporarily benefiting chemical companies based in the United States. [1]

In separate coverage, the United States Energy Information Administration conceded that supply disruptions in the Middle East are far worse than previous estimates, according to EnergyNow.com. Meanwhile, shipping traffic through the Strait of Hormuz has been largely blocked by Iran since February 2026, following the start of an air war launched by the United States and Israel. Iranian forces have attacked merchant ships, boarded vessels, and laid sea mines in the maritime choke point. [2][6]

The Strait of Hormuz historically handled about 25 percent of the world seaborne oil trade and 20 percent of global liquefied natural gas trade before the war started, as FTMQ Climate reported earlier. Although exports from the region previously experienced recoveries through alternative bypass routes, those detours created higher freight and security costs for operators. [6][7][8]

Despite these immediate logistical barriers, Oilprice reported that Middle Eastern chemical producers will likely retain their primary buyer base over the long term. The region continues to rely on key competitive levers that preserve its low-cost manufacturing advantages against international rivals. [1]