Chemical buyers are unlikely to permanently shift away from Middle Eastern suppliers despite Hormuz shipment disruptions, as the region’s pricing and production scale remain hard to match. The Middle East supplied more than 40% of global polyethylene exports last year, while Dow said polyethylene prices had risen more than 40% since late February.
Chemical buyers are unlikely to permanently shift away from Middle Eastern suppliers despite disruptions to shipments through the Strait of Hormuz. The Middle East accounted for more than 40% of global polyethylene exports last year, supplying Asia, Europe and Latin America. Gulf producers retain most volumes because of their cost advantage, while domestic and regional suppliers have captured roughly 20% of demand, up from almost negligible levels before the war.
Analysts said the disruptions have accelerated dual sourcing, but price remains the dominant factor in purchasing decisions, particularly for commodity chemicals. A BASF spokesperson said the disruptions reinforced the importance of diversifying supply chains but were unlikely to diminish the Middle East’s long-term significance, given its cost advantages and extensive production base.
The supply disruptions have tightened global chemical markets, allowing producers to pass higher costs on to customers. Dow CFO Jeff Tate said in July that polyethylene prices had risen more than 40% since late February. Eastman Chemical reported a nearly 10% increase in second-quarter revenue, supported by higher volumes and a 4% rise in selling prices.
