The prolonged war in the Middle East is shaking crude oil supply chains through the Strait of Hormuz, spreading cascading disruptions across Asia.
Oil and petrochemical feedstock supply disruptions triggered by the Iran war have effectively spilled over into virtually all industries, CNN and other international media reported Wednesday.
In South Korea, consumers have begun hoarding garbage bags. In Japan, concerns are mounting over potential shortages of plastic medical tubing used to treat patients with chronic kidney failure. In Malaysia, glove manufacturers have raised alarms over medical glove supplies as they struggle to procure petroleum-based raw materials.
The shocks are hitting both everyday goods and the medical sector indiscriminately. The supply of petrochemical products essential for producing footwear, clothing, plastic bags and pharmaceuticals has become unstable. Asia, which depends heavily on the Strait of Hormuz — a chokepoint through which a significant share of global crude oil shipments pass — is taking a direct hit. Experts predicted that consumer goods such as cosmetics, which rely heavily on packaging materials, would be among the first affected.
On-the-ground damage has already become visible. A polyester manufacturer in Haining, Zhejiang Province, China, halted all new orders after raw material prices surged 50%. In Indonesia, packaging costs have doubled, pushing companies to reduce packaging thickness or explore alternative materials such as paper, glass, aluminum and recycled plastics. However, retooling production lines and meeting safety regulations would take at least six months, posing a significant obstacle.
The scope of supply chain disruption is vast. The Middle East supplies 17% of the world's naphtha, 30% of plastic resins, 45% of sulfur used as fertilizer feedstock, and 33% of helium used in semiconductors, medical devices and aviation. In India, condom manufacturers are reporting production setbacks due to shortages of packaging materials, silicone oil and ammonia. Fertilizer prices for U.S. farms have already risen by roughly one-third.
Asian countries have launched emergency responses including releasing strategic oil reserves, imposing fuel price caps and reducing work hours. However, concerns are growing that supply shortages will intensify in earnest once the last crude oil shipments that departed before the war broke out are depleted starting in April.
"The focal point has already shifted from price increases to physical shortages," JPMorgan said. "Asia has moved beyond the prevention stage and entered an actual crisis phase." Experts echoed the assessment, saying that "even if the Strait of Hormuz normalizes immediately, it would take months for the plastics industry to regain stability."