The Strait of Hormuz is operating at only 10% to 15% of pre-conflict capacity. Crude loadings from the Middle East have fallen from 20 million barrels per day in early July to 12 million, creating a daily supply gap of 8.3 million barrels. Brent crude opened near USD 89 per barrel, while gold touched USD 4,383 per ounce. For the textile industry, these numbers mean the pricing anchor for chemical fiber feedstocks is being recalibrated by geopolitics—the link between crude oil and polyester filament or staple fiber has never been more sensitive.
Background
The escalation of US-Iran tensions is the core trigger. Iran's military publicly banned US forces from the Persian Gulf, the Gulf of Oman, and the Strait of Hormuz, and introduced a bounty policy against American personnel, moving from diplomatic friction to an actual shipping blockade. Meanwhile, Russia and Ukraine continue to strike each other's ports, refineries, and military infrastructure, amplifying supply-side uncertainty.
In contrast, Northeast Asia shows signs of de-escalation: the US has ordered a reduction in joint military exercises with South Korea and revealed that it asked Seoul to cooperate on Iran's denuclearization but was refused. This pattern of 'tight in the Middle East, loose in Northeast Asia' makes the distribution of risk premiums uneven and implies divergent logistics and cost expectations for different textile export markets.
US commercial crude inventories rose by 17.42 million barrels in a single week, the largest increase in three and a half years, while the Strategic Petroleum Reserve fell below 300 million barrels. On the surface, rising inventories seem bearish, but the long-term backdrop of low stocks remains unchanged—global crude and product inventories are still at five-year lows, and US retail gasoline and diesel prices are at record highs for the period. The coexistence of short-term inventory builds and long-term lows suggests the market is in a fragile balance where geopolitics sets the upside and fundamentals underpin the floor.
Industry Impact
For the chemical fiber chain, every USD 1 per barrel move in crude translates into roughly RMB 30 to 50 per ton in polyester production costs. With Brent hovering between USD 85 and 89, cost pressure on fiber producers is unlikely to ease soon. More critically, OPEC and the IEA have both downgraded their 2026 global oil demand growth forecasts, and as the US summer driving season ends, refinery run cuts in September-October will tighten naphtha and PX supply, feeding through to PTA and MEG.
This mismatch—strong oil, weak demand—is reshaping the price pass-through rhythm for polyester filament. Traditionally, fiber mills could raise prices to pass on costs downstream, but when terminal apparel orders weaken due to slowing global demand, pass-through becomes more difficult. For fabric buyers, this means raw material volatility may not immediately reflect in greige cloth quotes, but will gradually appear through inventory costs over the next one to two months.
From a regional cluster perspective, Keqiao and Shengze, which focus on polyester fabrics, react most directly to crude price moves. Traders in these areas often price on a 'crude plus processing fee' basis, so a spike in oil quickly lifts daily quotes, but whether transactions close depends on downstream order acceptance. In contrast, Nantong home textiles, which rely more on cotton and blends, are less directly affected, though changes in logistics and international freight still add pressure.