The average daily number of vessels transiting the Strait of Hormuz remains less than 60% of pre-conflict levels, with 162 fully loaded crude oil tankers stranded in surrounding waters, carrying approximately 120 million barrels of crude oil. This is the reality after the US-Iran 60-day temporary ceasefire agreement took effect. Although international crude oil prices have rapidly corrected—WTI falling to $73.21/barrel and Brent closing at $76.85/barrel—the shipping market has not seen a full recovery. For the textile industry, this 'semi-paralysis' of the strait is quietly rewriting the cost logic of synthetic fabrics through the crude oil-naphtha-PTA-polyester filament price transmission chain.
Crude Oil Backlog and Price Expectations: Short-Term Benefits and Long-Term Risks for Synthetic Fiber Costs
On June 23, international crude oil fell about 1% in a single day, and throughout June, both major benchmark futures accumulated declines of nearly 16%, rapidly deflating geopolitical risk premiums. For textile companies, this means a short-term window of lower procurement costs for synthetic raw materials like PTA and MEG—polyester filament prices typically lag crude oil by 1-2 weeks, and the current oil price decline has begun to reflect in polyester chip quotations.
However, multiple institutional analysts explicitly caution that the current correction is more about short-term sentiment release than a fundamental reversal. Bloomberg Intelligence analyst Lee Klaskow points out that the 60-day ceasefire agreement is highly unstable, with fundamental differences among parties unresolved. Should the strait see another attack on vessels or channel control incidents, the outflow of backlogged crude will be interrupted again, and risk premiums will quickly rebound. Textile companies that judge long-term procurement costs based solely on short-term price drops may face a passive situation of surging raw material costs in the next rebound.
From a pricing logic perspective, the recent oil price decline has already priced in the short-term navigation recovery benefits. Refineries and traders should not blindly chase lower prices. For polyester fiber plants, current PTA inventory cycles are about 7-10 days; it is recommended to lock in 1-2 months of raw material usage based on actual orders rather than betting on directional market moves.
High War Risk Premiums: How Shipping Costs Erode Fabric Export Margins
The rise in insurance costs due to geopolitical conflict is a core pain point preventing shipowners from fully returning to the Hormuz route. Current war risk insurance premiums in the strait, while down from conflict peaks, remain at around 1% of vessel hull value—a tenfold increase from the pre-conflict rate of 0.1%. For a typical Very Large Crude Carrier (VLCC), a single transit through the Strait of Hormuz incurs war risk premiums of up to $2 million.
This cost structure is altering global crude oil shipping flows: some small and medium shipowners choose to bypass the strait via the Cape of Good Hope, extending voyage distances and increasing fuel and labor costs; major shipping companies only deploy a few vessels for trial transits, unwilling to commit large-scale capacity to the Persian Gulf. The direct consequence is sustained damage to global crude oil transport turnover efficiency, which in turn pushes up the landed cost of crude oil in Asia, especially China.
For fabric companies that rely heavily on petroleum-based synthetic fibers like polyester and nylon, this means:
- Freight rates for importing upstream raw materials like PX and MEG are unlikely to return to pre-conflict levels in the short term
- Extended shipping schedules for crude from Middle Eastern producers to Asia may affect domestic refinery utilization rates, indirectly leading to periodic PTA supply tightness
- In export operations, if fabric orders involve Middle Eastern destinations or routes through the Hormuz Strait, war risk surcharges will directly erode profit margins
Conservative Shipowner Strategies and the 'Dark Ship' Phenomenon: Reduced Supply Chain Transparency
Currently, the average daily number of vessels transiting the strait is less than 60% of pre-conflict levels, with shipowners generally adopting a cautious, trial-and-error approach. More concerning is that a large number of Iran-linked tankers and small/medium product tankers have chosen to turn off their AIS signals and operate in stealth mode, becoming 'dark ships.' As of June 23, only traceable fully loaded tankers numbered 162, meaning the actual number of stranded vessels and accumulated oil volume is higher than available statistics indicate.
This lack of information transparency introduces hidden risks to the textile supply chain:
- The true supply of crude oil is difficult to predict accurately, causing PX and PTA price volatility to potentially exceed conventional model expectations
- Some refineries may reduce utilization rates due to delayed raw material arrivals, tightening polyester raw material supply
- Shipowners' reluctance to deploy large capacity into the Persian Gulf means that if the ceasefire collapses, capacity withdrawal will be even faster, concentrating supply chain disruption risks
Practical Recommendations
For Buyers - Lock in raw material usage in stages: Use the current crude oil correction window to lock in 1-2 months of PTA and MEG consumption via futures or forward contracts, avoiding directional bets - Monitor war risk surcharges: Confirm with freight forwarders whether Middle East route quotations include war risk premiums, and evaluate whether to advance stock or switch to Southeast Asian suppliers - Track refinery utilization: Regularly monitor the raw material inventory and operating rates of major domestic PTA plants; if utilization drops more than 5% for two consecutive weeks, activate emergency procurement plans
For Exporters - Optimize route selection: For Middle East and South Asian clients, evaluate alternative routes via the Cape of Good Hope or Red Sea-Suez Canal in advance, comparing total costs - Hedge contract terms: Include 'geopolitical risk clauses' in export contracts, specifying that delivery delays due to strait closure do not constitute breach of contract - Diversify customer structure: In the short term, reduce the proportion of orders for synthetic fabrics with high dependence on Middle Eastern crude, and increase promotion of products using cotton, linen, or recycled fibers
The 'semi-paralysis' of the Strait of Hormuz will not be fully resolved within 60 days. The textile industry must accept a reality: synthetic fiber raw material costs in the second half of 2026 will swing back and forth between geopolitical risks and market sentiment. Rather than gambling on oil price fluctuations, it is wiser to build supply chain resilience.