The temporary ceasefire in the Strait of Hormuz has not brought relief to shipping markets. As of June 23, 162 laden crude tankers remain stranded in and around the strait, holding approximately 120 million barrels of oil—excluding 'ghost ships' that have turned off their AIS signals. International oil prices have fallen sharply on ceasefire expectations, with WTI and Brent crude losing nearly 16% in June, but war risk insurance premiums remain 10 times pre-conflict levels. For the textile and chemical fiber industry, this means cost volatility for raw materials like PTA and polyester filament is far from over, and supply chain fragility is masked by short-term easing.
Oil Glut and Price Correction: Short-term Gains Overstretched, Medium-term Risks Linger
The Strait of Hormuz handles nearly 20% of global seaborne crude oil, and its navigability directly determines international oil pricing. After the ceasefire agreement, markets anticipated a rapid inflow of stranded crude, triggering a sharp price correction. However, industry data shows that daily vessel transits are still less than 60% of pre-conflict levels, with shipowners adopting cautious trial sailings, creating a logjam where vessels are 'willing but unable to move, forced to queue.'
More alarmingly, this oil price decline is largely a short-term sentiment release, not a fundamental reversal. Bloomberg Intelligence analyst Lee Klaskow notes that the 60-day ceasefire is highly fragile, with underlying Middle East divisions unresolved. Should the strait see renewed attacks or diplomatic escalation, risk premiums will quickly rebound, potentially triggering a phase of oil price hikes. For textile fiber enterprises, judging medium-term procurement costs solely on short-term price drops could lead to sudden raw material price spikes.
War Risk Insurance Costs High: Conservative Shipowner Strategies Continue to Squeeze Capacity
Current war risk insurance premiums in the strait, while down from conflict peaks, remain at around 1% of vessel hull value—10 times the pre-conflict rate of 0.1%. For a very large crude carrier (VLCC), a single transit of the Strait of Hormuz costs up to $2 million in war risk insurance, severely eroding shipping profits.
This cost structure drives conservative shipowner strategies: some smaller operators reroute via the Cape of Good Hope, increasing voyage length and fuel costs; major players only deploy a few vessels for trial passages. Unless war risk premiums return to normal, strait shipping cannot restore pre-conflict efficiency. The resulting drag on global crude transport capacity means the petrochemical feedstock supply chain for textiles will face long-term bottlenecks.
Transmission to Textile Chemical Fiber Chain: PTA, Polyester Filament Costs Under Pressure
Crude oil price fluctuations directly impact core textile chemical fiber feedstocks—PTA (purified terephthalic acid) and polyester filament. China is the world's largest PTA producer, but about 60% of its capacity relies on imported crude and naphtha. The strait congestion plus war risk costs raise the landed cost of Middle Eastern crude, in turn pressuring PTA manufacturers' raw material procurement.
Historically, a 10% rise in crude oil prices triggers a 5%-8% rise in PTA prices, with polyester filament lagging by 2-4 weeks. While oil prices have corrected short-term, a geopolitical escalation could rapidly push chemical fiber costs higher. For textile firms, this means compressed order margins, especially for polyester-based apparel fabrics and home textiles.
- Buyers: Avoid overstocking at low oil prices; adopt small-batch, multi-frequency procurement; use forward contracts to lock in some costs.
- Exporters: Monitor international shipping insurance cost changes; embed geopolitical risk premium clauses in export quotes to avoid losses from sudden freight spikes.