Middle East Conflict Sends Crude and Polypropylene Prices to Multi-Year Highs
Following the escalation of conflict in late February 2026 and disruptions through the Strait of Hormuz, Brent crude surpassed USD 120/bbl and polyethylene and polypropylene prices climbed to roughly four-year highs, putting particular pressure on Asian supply chains.
When tensions in the Middle East escalated sharply on 28 February 2026, shipping through the Strait of Hormuz — a corridor handling roughly one-third of global crude oil and about 20% of LNG flows — slowed dramatically. The International Energy Agency described the resulting disruption as the largest supply shock in the history of the global oil market, while the IMF noted that large energy importers in Asia and Europe are bearing the brunt of higher fuel and input costs.
Crude price spikes have transmitted rapidly through the petrochemical chain. According to a Reuters report dated 26 March 2026, prices for plastics such as polyethylene (PE) and polypropylene (PP) have surged to roughly four-year highs, tracking higher crude and naphtha feedstock costs. Analysts estimate that closure of the Strait could disrupt nearly 1.2 million barrels per day of global naphtha export flows, further tightening feedstock availability for petrochemical production. Asia's naphtha refining margin has risen above USD 400/ton over Brent.
For polypropylene specifically, the cost pass-through is direct. PP is derived from propylene monomer, which in turn is sourced from crude-oil refining or natural-gas processing. In the United States, polymer-grade propylene (PGP) prices surged more than USD 0.11/lb in early March 2026 — their highest level since early 2025 — pushing downstream PP contract prices higher. Statista data shows significant global PP price increases since March 2026, with Asia and Europe most exposed due to their reliance on Middle Eastern feedstock imports.
For PP-based stationery manufacturers such as Sanhua — producing display books, sheet protectors, and binders — raw-material volatility directly affects product cost structures. Importers are advised to confirm quotation validity periods with suppliers, monitor freight and insurance cost changes, and evaluate whether to adjust stocking schedules to hedge short-term price risk.
Sources: Reuters (26 Mar 2026); IMF (30 Mar 2026); Statista — Impact of the 2026 Iran war on global commodity markets.