When Brent crude fell below the $80 mark, the tense nerves of the chemical fiber supply chain finally got a brief respite. On August 5, Iran and Oman reached a preliminary agreement on shipping through the Strait of Hormuz, closing the traditional dual-lane system and diverting merchant ships to a new temporary route through Iranian territorial waters. Transit efficiency rose by 30%, and crude oil freight rates plunged 22% in a single week. For the textile industry, this shift directly affects cost expectations for chemical fiber raw materials like PTA and polyester filament, but it is far from time to relax.
Background
The Strait of Hormuz carries nearly 30% of global seaborne crude oil and 20% of LNG exports, with an average of 130-140 merchant ships transiting daily under normal conditions. Over the past two months, due to geopolitical conflicts, daily transits once fell to single digits, forcing many tankers to detour around the Cape of Good Hope, extending shipping times and inflating logistics costs, which pushed international oil prices up, with Brent briefly exceeding $110 per barrel. After the August 5 agreement, market risk premiums quickly unwound, and crude fell for a third consecutive session, with WTI closing at $75.22 and Brent at $79.45 per barrel.
The operating rules for the new route are still being refined, covering three main areas: 72-hour advance online reporting, onboard inspection, and tiered transit service fees. This means that the reconfiguration of shipping processes is not immediate; transit volumes remain significantly below normal levels, with daily totals not exceeding 60 vessels. For Asian refiners dependent on Middle Eastern crude, the short-term supply gap is hard to fill quickly, and the fundamental supply-demand balance remains tight.
Industry Impact
Lower oil prices directly ease cost pressure on chemical fiber raw materials. Prices of upstream materials like PTA and MEG are highly correlated with crude oil; after Brent fell below $80, the theoretical production costs of polyester filament and staple fiber have declined, reducing procurement costs for weaving enterprises. However, a plunge in freight rates does not mean landed costs fall simultaneously—ships still en route around the Cape of Good Hope have yet to reflect lower freight, and spot market discounts for Middle Eastern crude have weakened. Refiners are adopting a wait-and-see attitude, with some Asian refiners postponing medium-term purchases and shifting toward American and Russian supply sources.
For downstream textile companies, this means raw material price volatility remains elevated. On one hand, lower oil prices may prompt polyester plants to cut prices, pulling down grey fabric and finished fabric prices; on the other hand, if the strait's recovery stalls, an oil rebound will quickly transmit to chemical fiber costs. Buyers who fail to stock up at low levels may miss the cost window. Moreover, the Red Sea shipping risks persist, putting both global energy chokepoints under pressure simultaneously. A structural supply gap implies that the oil price center is unlikely to fall significantly, and chemical fiber cost support remains intact.