WTI crude oil surged as much as 7% intraday, with Brent crude breaking above $87 per barrel. The immediate trigger was Iran's ballistic missile attack on a U.S. military base in Jordan, shattering market hopes for a ceasefire in the Middle East. For the textile industry, crude oil volatility in the $80-100 range means renewed cost pressure on synthetic fiber feedstocks.
Background
According to U.S. Central Command, Iran launched multiple ballistic missiles at a U.S. base in Jordan on Wednesday afternoon, all of which were intercepted. The attack came hours before President Trump threatened retaliatory strikes against Iran and marked the first missile assault on a U.S. base since Washington suspended attacks on Iran last Friday. Market expectations for an end to the conflict evaporated, sending WTI from $79.5 to $83.7 per barrel, while Brent rose 6.5% to $87.3. Industry data showed declining U.S. crude inventories amplified the geopolitical risk premium. Analysts at UBS noted that renewed military operations and Iranian threats to control Strait of Hormuz shipping are jointly driving prices higher. DBS Bank's energy research head expects Brent to remain in a volatile $80-100 range.
Industry Impact
Crude oil is the upstream feedstock for polyester fibers. Every $10 per barrel increase in oil raises polyester filament costs by approximately 800-1,000 yuan per ton. With WTI now above $80, sustained conflict would push PTA and polyester prices higher. For weaving and dyeing mills in clusters like Keqiao and Shengze, raw material cost increases quickly translate into higher grey fabric and finished fabric quotes. Buyers are accelerating inquiries, and some mills have begun testing price hikes on orders. However, downstream apparel brands have limited tolerance for final price increases, squeezing margins for fabric mills and traders. Higher synthetic fiber costs could also shift some orders toward cotton or blended products, but cotton prices themselves are supported by energy costs and transport expenses, making a general upward shift in textile raw material prices likely.