The renewed blockade of the Strait of Hormuz has exposed the fragility of global crude oil supply chains. Iran claims traffic through the strait has dropped to zero, pushing Brent crude above $90 per barrel. This geopolitical event quickly rippled through the polyester value chain, with PTA and MEG futures rising sharply on July 20, prompting multiple polyester plants to raise polyester filament yarn prices. For textile mills, the pressure on raw material costs is shifting from expectation to reality.
Geopolitical Escalation, Multiple Risks to Oil Supply
The Hormuz blockade is not an isolated incident. The US-Iran conflict continues to escalate, with US forces conducting consecutive night strikes on Iran, while Iran retaliates by closing the strait. Although the US energy secretary pledged to keep the strait open, actual traffic has fallen to zero, fueling market fears of supply disruption and pushing oil prices higher.
More alarmingly, the oil market faces at least three potential "black swans." First, the Russia-Ukraine war has entered a new phase, with Ukrainian drone attacks on Russian refineries affecting domestic crude production. Second, Iran may also block the Bab el-Mandeb strait—which transported about 4.2 million barrels per day (bpd) in 2025, accounting for 6% of global oil trade. After the Hormuz blockade, traffic through Bab el-Mandeb surged to 7.4 million bpd in June 2026, peaking at 9 million bpd. A blockade there would deliver a double blow to global supply. Third, some Southeast Asian countries had depleted their crude oil inventories in the first half of the year, and the brief reopening of Hormuz offered limited replenishment, leaving stocks fragile.
These factors suggest that oil prices are not just spiking temporarily but have a foundation for sustained increases. If any of these black swans materialize, prices could quickly break previous highs.
Polyester Filament Pricing: From Cost Pass-Through to Supply-Demand Dynamics
Polyester filament prices are strongly correlated with crude oil costs. Polyester mills face a dilemma: on one hand, previous profit margins and current inventory pressures limit their ability to raise prices significantly; on the other hand, rising costs of PTA and MEG squeeze profit margins.
Industry data shows that polyester filament prices have risen for several consecutive days, but the increases are relatively moderate, resembling a "slow knife cut." This does not mean the risk is gone. The polyester chain also has a tipping point: once crude oil prices cross a certain threshold or geopolitical events cause a tangible supply shortage, mills may be forced to hike prices sharply, mirroring the surge seen after the Chinese New Year.
For textile mills, the key concern is the pace of price increases. Current off-season demand is weak, and downstream weaving mills are cautious about procurement, but their raw material inventories are generally low. Once expectations of further price rises solidify, a wave of panic buying could push prices even higher.