Asia and Turkey face the strongest petrochemical impact two weeks after Middle East conflict

Two weeks after the outbreak of the Middle East conflict, the effects across the global petrochemical supply chain are becoming increasingly visible. As the region plays a critical role in exporting crude oil, LNG, propane, and polyolefins, disruptions there have rapidly transmitted supply shocks to markets worldwide.

Feedstock, monomer, and polymer prices have all surged as supply risks and logistical disruptions ripple across the industry. While the consequences are being felt globally, early market responses indicate that Asia and Turkey are experiencing the most significant impact.

Gulf logistics disruptions block key export routes

The first major shock came from logistics. The Persian Gulf, one of the world’s most vital export corridors for energy and petrochemicals, has seen normal shipping operations severely disrupted as security concerns and operational restrictions intensified.

Several key ports in the Gulf — including Jubail, Dammam, and Jebel Ali — have faced disruptions, significantly reducing shipments that normally supply Asian markets.

Producers and traders have attempted to reroute cargo through Saudi Arabia’s Red Sea ports such as Jeddah and King Abdullah, but this alternative provides only partial relief.

Cargo must first be transported across Saudi Arabia by truck before reaching these ports, a process complicated by limited truck availability and rising inland transportation costs. Even after reaching the Red Sea, shipping options remain constrained.

Northbound routes through the Suez Canal toward Europe are still possible, although they face limitations due to reduced feeder vessel availability and irregular container connections.

However, routes toward Asia remain far more complicated. Ships must pass through the southern Red Sea and the Bab el-Mandeb Strait, one of the most sensitive maritime chokepoints in the current conflict. As a result, many direct shipping services to Asia have been suspended, sharply reducing the flow of Middle Eastern polymers to Asian markets.

Asia faces the most severe pressure

For Asia, the disruption has quickly extended beyond rising prices to operational difficulties across the petrochemical sector.

The region depends heavily on Middle Eastern energy supplies and feedstocks. The sudden supply shock has already led to production cuts and multiple force majeure declarations at steam crackers and downstream petrochemical facilities.

Producers are struggling with soaring feedstock costs and tightening availability of LPG, naphtha, and other key inputs.

Government authorities are also starting to intervene. In India, the government has prioritized natural gas supplies for household consumption, reducing availability for industrial users. Across Southeast Asia, authorities are tightening energy conservation measures and preparing contingency plans to address potential shortages.

With shipments reduced and feedstock costs rising sharply, polymer markets across Asia have reacted quickly, increasing pressure on import-dependent economies in the region.

Turkey also heavily exposed

Turkey is another market experiencing significant impact from the disruption. The country has relatively limited domestic petrochemical production and remains heavily dependent on imports for most polymer grades.

This reliance makes the Turkish market particularly sensitive to supply interruptions and rising global costs.

As Middle Eastern cargoes become more difficult to secure and feedstock prices climb worldwide, polymer prices in Turkey have increased rapidly, reflecting both tighter supply and higher import costs.

Early lessons from the conflict

Two weeks into the conflict, a clear pattern is emerging across global petrochemical markets: supply shocks originating in the Middle East are spreading throughout the entire supply chain.

While the disruption is being felt worldwide, the impact has been uneven, with Asia and Turkey currently bearing the greatest pressure from the ongoing crisis.

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