Chemical feedstock disruption from Strait of Hormuz closure (with Lizzy Burden)

The Strait closure has a bigger impact on chemical markets than on fuel markets: 25-30% of global ethylene volumes lost. Impact on Europe will come with a severe delay (months). Chemical prices already 70-250% of 2025 levels; consumer price increases likely in coming months.

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Chemical feedstock disruption from Strait of Hormuz closure (with Lizzy Burden)

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The chemical feedstock disruption (25-30% of global ethylene lost) and continued Strait closure imply sustained demand for crude as feedstock, supporting oil prices over the medium term.

The Strait closure has had a huge impact on global plastic and chemical markets. What does it mean for Europe?

Lizzy Burden
Phillip Hurst

The impact on chemical markets is bigger than on jet or road fuel: 25-30% of global ethylene volumes lost. For Europe, the impact comes with a severe delay - it will first materialize in Asia, then Europe will have to divert chemicals to Asia.

We're not there yet for Europe.
How hard has Asia been hit already?

Lizzy Burden
Phillip Hurst

Asian producers outside China (South Korea, Taiwan, Singapore, Japan, India) had less than half of production running as usual in early May. A lot of volumes already lost.
What to expect for European chemical markets in coming months?

Lizzy Burden
Phillip Hurst

Impact happens with severe delay. Mitigating factors (inventories, late March shipments) are fading. It's hard to see how chemical supplies won't get tighter, putting more pressure on prices already at 70-250% of 2025 levels. Consumer price increases across different products are likely in the next couple of months.

The argument is pretty hard not to make.

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