There has always been a sensitive transmission chain between crude oil prices and chemical fiber feedstock costs. On August 5, Brent crude fell below $80 per barrel, with WTI closing at $75.22, marking the third consecutive day of decline—the immediate trigger was the preliminary agreement between Iran and Oman on shipping through the Strait of Hormuz. For the textile industry, this means that the cost pressure on chemical fiber feedstocks such as PTA and ethylene glycol, which had been pushed up by geopolitical risks, may see a phased easing, but the transmission path is far more complex than it appears.
Event Background
The Strait of Hormuz carries nearly 30% of global seaborne crude oil and 20% of LNG exports, with an average of 130-140 commercial vessels transiting daily under normal conditions. For over 60 years, the strait has relied on a dual-lane system to maintain orderly traffic. However, according to the agreement disclosed on August 5, these two traditional lanes will be closed, and all commercial vessels will switch to a new temporary route through Iranian territorial waters, with supporting rules involving 72-hour advance online reporting, onboard inspections, and tiered transit service fees. Although transit efficiency has improved by 30%, current daily transits remain below 60 vessels, far from normal levels, with many tankers forced to detour via the Cape of Good Hope, extending shipping times and raising logistics costs across the chain.
Industry Impact
Falling crude prices directly benefit the chemical fiber industry chain. The cost center of PTA, polyester filament, and other products is highly correlated with oil prices. Brent crude falling below $80 means that polyester plants may see lower feedstock procurement costs, potentially improving profit margins. However, this benefit is subject to time lags and uncertainties: on one hand, the strait's navigation has not fully recovered, and Middle East crude supply cannot quickly return; Asian refineries remain highly dependent on Middle East crude, with American and West African oils only partially substituting. On the other hand, the Red Sea shipping risk persists, with both major energy chokepoints under pressure, creating a structural gap in global seaborne crude supply. Therefore, oil prices may fluctuate at low levels in the short term, but the room for deep declines is limited, and chemical fiber feedstock prices may show resilience in following declines but not rises.
For textile foreign trade enterprises, logistics costs are more noteworthy than oil price changes themselves. Detouring via the Cape of Good Hope avoids strait transit fees but adds about 10-15 days to voyage time, increasing fuel consumption, insurance costs, and capital occupation. Even with improved efficiency on the new route, the restructuring of inspection and reporting procedures may create new congestion points. This means that even if crude costs fall, fluctuations in shipping rates and delivery times may still erode profits. Some Asian refineries have already suspended long-term Middle East crude procurement and increased purchases from the Americas and Russia, a shift that will gradually transmit downstream to chemical fiber supply, affecting regional price competition dynamics.