The global textile chemical fiber supply chain is under pressure from the Strait of Hormuz. Despite a 60-day truce between the US and Iran, shipping has not normalized. As of June 23, 162 tracked oil tankers carrying 120 million barrels of crude remained stranded, excluding hidden 'dark ships.' Daily vessel transits are below 60% of pre-conflict levels, as shipowners adopt cautious strategies.
Crude Oil Price Drops Temporarily, but Chemical Fiber Costs Remain at Risk
On June 23, WTI crude closed at $73.21/barrel and Brent at $76.85/barrel, with June declines of nearly 16%. This drop reflects short-term sentiment rather than a fundamental reversal. For textiles, crude oil prices directly impact chemical fiber raw materials like PTA and polyester. Any renewed tensions could trigger price rebounds, making current lows misleading for long-term procurement.
War Risk Insurance Remains a Key Barrier
War risk insurance premiums in the Strait remain at 1% of vessel value, ten times the pre-conflict rate of 0.1%. For a VLCC, a single transit costs $2 million in premiums. This high cost deters shipowners from resuming normal operations, with some opting for longer routes via the Cape of Good Hope. Global crude transport efficiency stays impaired.
Impact on Textile Supply Chains
China's textile chemical fiber sector relies heavily on imported petrochemical raw materials from the Middle East. Shipping congestion and high insurance costs will raise landed costs for naphtha and PX. Crude volatility quickly transmits to PTA and MEG futures, increasing cost management challenges for downstream weaving, dyeing, and garment companies.