Walter Hart, Global Head of Olefins at S&P Global Energy CERA, stated at the World Petrochemical Conference that a full closure of the Strait of Hormuz would severely impact Asian petrochemical producers. Steam crackers in the Middle East would be forced to shut down, while other Asian plants would scale back operations due to feedstock shortages. Global ethylene production in 2026 is expected to fall by around 22 million tons, equal to 12% of 2025 output.
Military tensions in the Gulf have disrupted petrochemical feedstock supplies. About 29 million tons of annual ethylene capacity in the Gulf region is currently offline, with full shutdowns in Iran, Kuwait and Qatar, and other Middle Eastern plants running near minimum rates. This has already cut regional ethylene output by roughly 15 million tons.
The Middle East has around 35 million tons of ethylene capacity, of which nearly 6 million tons is located outside the Persian Gulf. This leaves 29 million tons of Gulf-based ethylene capacity directly exposed to supply disruptions.
Supply chain shocks have spread well beyond the Gulf. Feedstock shortages of naphtha and crude have forced petrochemical facilities across Asia to reduce run rates.“More than half of global capacity has been affected,” Hart noted. In addition to the 29 million tons disrupted in the Gulf, feedstock crunches have hit about 105 million tons of ethylene capacity in Asia.
Excluding the Gulf region, Hart estimates 7–8 million tons of global ethylene production will be lost this year due to supply chain strains.Data shows global ethylene production reached 185 million tons in 2025, with total capacity at around 232 million tons.
The conflict has severely disrupted Middle Eastern exports of polyethylene (PE) and ethylene glycol (EG) to Asia, roiling supply chains for polyolefins, polyester and PET.
Long-term ethylene demand is still expected to grow, though at a slower pace. Hart projects operating rates and profit margins will not fully recover until the early to mid-2030s, when incremental demand catches up with new capacity additions.
Post time: Apr-10-2026