Middle East Conflicts Disrupt Ethylene Industry and Output Possibly Falls by Over 22 Million Tons in 2026
2026-4-14
Recently, Walter Hart, Global Head of Olefins at S&P Global Energy CERA, stated at the World Petrochemical Conference that a full blockade of the Strait of Hormuz would severely impact petrochemical companies in Asia. Steam crackers in the Middle East would be forced to shut down, while petrochemical plants elsewhere in Asia would have to scale back production due to feedstock shortages. Global ethylene production in 2026 is projected to drop by approximately 22 million tons, equivalent to 12% of global ethylene output in 2025.
U.S.-Israeli military strikes against Iran have disrupted petrochemical feedstock supplies. According to Hart, around 29 million tons of ethylene capacity in the Gulf region is currently not operating normally. Ethylene facilities in Iran, Kuwait and Qatar have been fully shut down, while plants in other Middle Eastern countries are running near minimum levels. As a result, the region has lost roughly 15 million tons of ethylene production.
¡°The Middle East has around 35 million tons of annual ethylene capacity. Of this, nearly 6 million tons is located outside the Persian Gulf. Therefore, the incident has directly affected 29 million tons of ethylene capacity within the Gulf area,¡± Hart explained.
Supply chain impacts extend far beyond the Gulf. Disruptions to naphtha and crude oil supplies have forced Asian petrochemical plants to reduce operating rates.
¡°More than half of global capacity has been affected by this event,¡± Hart noted. In addition to the 29 million tons of impaired ethylene capacity in the Gulf, feedstock shortages have disrupted around 105 million tons of ethylene capacity in Asia.
Hart estimates that, outside the Gulf, global ethylene output losses from supply chain issues will reach 7¨C8 million tons this year.
Data shows global ethylene production reached about 185 million tons in 2025, with total global capacity at approximately 232 million tons.
In terms of ethylene derivatives, the conflict has severely disrupted polyethylene and ethylene glycol exports from the Middle East to Asia, further unsettling supply chains for various polyolefin products including polyester and polyethylene terephthalate (PET).
Hart said long-term ethylene demand is still expected to grow steadily, albeit at a slower pace. A recovery in operating rates and profit margins is not expected until the early to mid‑2030s, when incremental demand will match new capacity additions.
U.S.-Israeli military strikes against Iran have disrupted petrochemical feedstock supplies. According to Hart, around 29 million tons of ethylene capacity in the Gulf region is currently not operating normally. Ethylene facilities in Iran, Kuwait and Qatar have been fully shut down, while plants in other Middle Eastern countries are running near minimum levels. As a result, the region has lost roughly 15 million tons of ethylene production.
¡°The Middle East has around 35 million tons of annual ethylene capacity. Of this, nearly 6 million tons is located outside the Persian Gulf. Therefore, the incident has directly affected 29 million tons of ethylene capacity within the Gulf area,¡± Hart explained.
Supply chain impacts extend far beyond the Gulf. Disruptions to naphtha and crude oil supplies have forced Asian petrochemical plants to reduce operating rates.
¡°More than half of global capacity has been affected by this event,¡± Hart noted. In addition to the 29 million tons of impaired ethylene capacity in the Gulf, feedstock shortages have disrupted around 105 million tons of ethylene capacity in Asia.
Hart estimates that, outside the Gulf, global ethylene output losses from supply chain issues will reach 7¨C8 million tons this year.
Data shows global ethylene production reached about 185 million tons in 2025, with total global capacity at approximately 232 million tons.
In terms of ethylene derivatives, the conflict has severely disrupted polyethylene and ethylene glycol exports from the Middle East to Asia, further unsettling supply chains for various polyolefin products including polyester and polyethylene terephthalate (PET).
Hart said long-term ethylene demand is still expected to grow steadily, albeit at a slower pace. A recovery in operating rates and profit margins is not expected until the early to mid‑2030s, when incremental demand will match new capacity additions.