Key facts
- Dow is reportedly considering exiting its $20 billion chemicals partnership with Saudi Aramco.
- The joint venture is Sadara Chemical Co, in which Dow holds a 35% stake.
- The potential exit is influenced by a prolonged industry downturn and Middle East conflict.
- Saudi Aramco or other investors may bid for Dow's stake.
- Dow has a negative investment balance of $793 million in the venture.
Dow is reportedly weighing an exit from its $20 billion chemicals partnership with Saudi Aramco, citing a prolonged industry downturn and the impact of the Middle East conflict. Bloomberg News reported that Saudi Aramco could potentially acquire Dow's 35% stake in the joint venture, Sadara Chemical Co, or other investors might bid for the holding.
The U.S.-Israeli war on Iran has disrupted oil and petrochemical flows, constrained supply chains, and increased operating costs, directly impacting Dow's regional joint ventures. This adds pressure to an industry already grappling with stagnant demand, rising production costs, and global oversupply.
Dow has been undertaking operational reviews to improve profitability, including workforce reductions. The Sadara complex in Jubail, with an annual production capacity exceeding 3 million metric tons, experienced a temporary shutdown earlier this year due to supply chain disruptions stemming from the conflict.
As of June 30, Dow reported a negative investment balance of $793 million in Sadara Chemical Co and had suspended recognition of losses from the venture in the first quarter of 2026. Shares of Dow declined more than 1% following the report.
Discussion