When Brent crude broke above $95 per barrel in electronic trading and WTI surged past the $90 mark, cost sheets across the textile industry began to be redrawn. With Brent up nearly 60% year-to-date, this geopolitical shock is not a one-off pulse. It points to long-term uncertainty over the Strait of Hormuz, a global energy choke point, meaning the cost-support logic for the chemical fiber supply chain is undergoing a qualitative shift.
Event Background
Over the past weekend, U.S. military forces struck three Iranian oil tankers, destroying one, in retaliation for Iran's ballistic missile attack on a U.S. Navy vessel. Subsequently, Iran's top security official announced the establishment of a new restricted zone outside the Strait of Hormuz, extending from the U.S. naval blockade into parts of the Persian Gulf. This chain of actions marks a sharp escalation in previously relatively calm U.S.-Iran relations, directly triggering a jump in crude oil prices at the market open.
The Strait of Hormuz handles roughly one-fifth of global seaborne oil trade. Any military action targeting this waterway raises fears of prolonged disruption to energy transportation. U.S. Energy Secretary Chris Wright made clear that the Navy will not relax its deployment in the strait, including blocking Iranian oil exports and ensuring safe passage for other commercial vessels. This suggests the militarization of the strait could persist, not just a short-term skirmish.
For the textile industry, oil prices are never just a fuel cost issue. Crude oil is the source of the polyester (PET) chain, where every link—from PX to PTA to polyester filament and staple fiber—closely follows oil price movements. Brent's nearly 60% gain this year has already left traces on polyester raw material prices, and the latest incident will further transmit cost pressures downstream.
Industry Impact
The time-lag effect of chemical fiber cost pass-through deserves attention. Oil price spikes typically reflect in PX and PTA quotes within one to two weeks, followed by increases in polyester filament and staple fiber prices. For fabric manufacturers relying on chemical fibers, this means significantly higher procurement costs, while downstream order price adjustments often lag, squeezing profit margins from both ends.
Meanwhile, steeper increases in diesel and other refined products directly raise logistics costs for textiles. Whether in domestic trucking or cross-border shipping, higher fuel surcharges are hard to avoid. For export-dependent textile companies, this means even if FOB quotes remain unchanged, the actual landed cost rises, affecting overseas clients' purchasing decisions.
More profound is the impact on supply-chain reconfiguration. Long-term instability in the Strait of Hormuz will prompt global buyers to reassess the reliability of petrochemical supplies from the Middle East, potentially shifting some orders to alternative sources in China or South Korea. But in the short term, such substitution effects may not fully offset potential supply gaps, and volatility in chemical fiber raw material prices is expected to remain elevated.