SupplySaturday, 25 April 2026·India
Force majeure declarations rise across Asia as Middle East conflict disrupts petrochemical supply
The ongoing conflict in the Middle East, particularly around the Strait of Hormuz, has triggered a sharp increase in force majeure declarations across Asia’s petrochemical sector. As of March 17, 2026, a total of 35 force majeure notices had reportedly been issued across Asia and the Middle East, driven by supply chain disruptions that are significantly impacting the availability of key chemicals and polymers.
Several major companies have been affected. LyondellBasell has declared force majeure on its European polyolefin supplies due to the Iran conflict, while SCC has introduced similar emergency measures at its Rayong olefins complex in Thailand following feedstock disruptions. In addition, Chandra Asri in Indonesia has reduced operating rates at its cracker and polyolefin units, and The Polyolefins Company (TPC) in Singapore has temporarily halted multiple production lines in response to ongoing supply chain issues.
These disruptions have led to a sharp rise in prices for key feedstocks and chemicals, including naphtha and olefins, resulting in higher production costs across the petrochemical value chain.
The average utilization rate of chemical plants in Asia is projected to fall from 83% in February to 57% in May 2026, indicating a significant decline in production capacity. This reduction reflects the broader impact of the conflict on the industry, as numerous polypropylene, polyethylene, and polyethylene terephthalate plants have also declared force majeure or lowered operating rates.
With buyers likely to face both higher prices and reduced product availability, sellers may need to carefully manage inventory and adjust pricing strategies. The situation highlights the deep interconnectedness of global supply chains and the far-reaching consequences geopolitical tensions can have on commodity markets.
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Several major companies have been affected. LyondellBasell has declared force majeure on its European polyolefin supplies due to the Iran conflict, while SCC has introduced similar emergency measures at its Rayong olefins complex in Thailand following feedstock disruptions. In addition, Chandra Asri in Indonesia has reduced operating rates at its cracker and polyolefin units, and The Polyolefins Company (TPC) in Singapore has temporarily halted multiple production lines in response to ongoing supply chain issues.
These disruptions have led to a sharp rise in prices for key feedstocks and chemicals, including naphtha and olefins, resulting in higher production costs across the petrochemical value chain.
The average utilization rate of chemical plants in Asia is projected to fall from 83% in February to 57% in May 2026, indicating a significant decline in production capacity. This reduction reflects the broader impact of the conflict on the industry, as numerous polypropylene, polyethylene, and polyethylene terephthalate plants have also declared force majeure or lowered operating rates.
With buyers likely to face both higher prices and reduced product availability, sellers may need to carefully manage inventory and adjust pricing strategies. The situation highlights the deep interconnectedness of global supply chains and the far-reaching consequences geopolitical tensions can have on commodity markets.
Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.