Key facts
- Middle East chemicals production retains cost advantage despite Hormuz crisis.
- Diversification of polymer supply is occurring due to Middle East crisis.
- Middle East is world's largest exporter of polyethylene (43% of global exports in 2025).
- Polypropylene exports from Middle East least affected by war among key commodities.
- Polyethylene and polypropylene prices jumped over 50% since March.
Despite ongoing geopolitical tensions and supply disruptions in the Strait of Hormuz, the Middle East's chemical production is poised to maintain its cost advantage. While some buyers are diversifying their polymer supply chains, particularly benefiting U.S. companies in the short term, the long-term competitive edge of Middle Eastern producers is expected to persist due to their extensive production base and low-cost feedstock, primarily naphtha.
Many customers view their current diversification efforts as a hedge against immediate supply risks rather than a permanent shift, as the lower prices offered by Middle Eastern suppliers remain a primary factor in purchasing decisions. This cost advantage is seen as a key driver that outweighs the perceived supply risks for most buyers.
The Middle East is the world's leading exporter of polyethylene, the most used plastic globally, accounting for 43% of all international exports last year. While polypropylene exports have been the least impacted among key commodities, overall polymer prices have surged significantly since March. This environment, coupled with constrained raw materials and capacity elsewhere, has positioned U.S. chemical producers as immediate beneficiaries, while Asian and European counterparts face challenges from expensive or unavailable naphtha and high energy costs.