Recent uncertainties in Iran have raised global concerns over the supply of oil, gas, and certain chemical products, driving a wave of price increases across the energy and chemical sectors. Analysts note that: 1) The crude oil market is adjusting its supply-demand balance amid risk premiums and global strategic inventory replenishment. Assuming no long-term disruptions to Middle Eastern oilfield production, the average Brent crude price forecast for 2026 has been raised to $78 per barrel, benefiting oil and gas extraction as well as coal-to-olefins projects. 2) China's energy and chemical supply chain demonstrates strong resilience, with short-term supply disruptions expected to have a lesser impact compared to overseas companies. Once supply chain stability is anticipated, global inventory rebuilding is likely to support a sustained recovery in the chemical industry, highlighting leading firms with integrated industrial chains. 3) If international grain prices rise due to cost pass-through, domestic amino acid producers may benefit, while overseas gas-based urea companies could see a turnaround from difficult conditions. 4) Substitution-demand categories are poised for longer-term growth opportunities, including wind and solar power, energy storage, green hydrogen, bio-manufacturing, and resource recycling.
Blockades in the Strait of Hormuz are gradually leading to oilfield shutdowns, potentially causing significant short-term increases in international oil prices. Iran's restrictions on shipping through the Strait have impacted crude oil and condensate exports, which accounted for 31% of global trade volume in 2025, with nearly 80% of shipments originating from Saudi Arabia, Iraq, and the UAE. Continued closure of the Strait has constrained storage capacity in several Middle Eastern countries, leading to production halts. As of March 8, the number of days until storage depletion in Saudi Arabia, the UAE, Kuwait, and Qatar stood at 19, 21, 14, and 19 days, respectively. Factoring in geopolitical risk premiums and shifts in global supply and demand due to strategic stockpiling, and assuming no lasting damage to oil producers' production capacity, the average Brent price for 2026 has been revised upward to $78 per barrel. In an extreme scenario where oil production facilities suffer short-term irreparable damage and infrastructure such as desalination plants is affected, the forecast is raised to $95 per barrel.
China's energy and chemical supply chain is relatively well-developed, underscoring its resilience. Domestic data indicates that in 2025, China's crude oil production, crude imports, and refinery processing volumes were 220 million, 580 million, and 740 million tons, respectively. Output of key downstream products—gasoline, diesel, jet fuel, and oil-based olefins—amounted to 150 million, 200 million, 60 million, and 70 million tons, with year-on-year changes of -3%, -2%, +6%, and +12%, respectively. Exports of refined oil products via general trade reached 36.44 million tons. By the end of 2025, China's apparent onshore crude oil inventory exceeded 1.2 billion barrels, with Middle Eastern imports making up roughly 50% of total crude imports. Even if imports from the Middle East were to drop by 80%, China could still sustain nearly 260 days of supply by drawing down onshore inventories, assuming stable demand. In more severe scenarios, China could further ensure supply chain stability by reducing refined product exports, accelerating the substitution of traditional fuels with new energy sources, cutting output of surplus petrochemicals, and increasing crude imports from regions such as Africa and Canada.
Overseas markets may face more pronounced shocks to energy and raw material supplies, drawing attention to products like methionine and isocyanates. Data shows that in 2024, the share of oil and natural gas in energy consumption reached 59% in Europe, 56% in Japan, and 61% in South Korea. For many overseas chemical producers, oil and gas serve as dual pillars for both energy and feedstock. Supply volatility and potential price increases could lead to reduced output or even capacity shutdowns abroad. Overseas capacity shares for MDI, PVA, methionine, and vitamin E stood at 52%, 41%, 54%, and 49%, respectively, in 2024. Since late February, significant price increases in international crude oil, natural gas, and sulfur have driven up prices for MDI, methionine, and vitamin E, which is expected to benefit relevant domestic producers.
Global supply tightness in refined products and fertilizers is creating opportunities for alternative categories. Given that Iran and the Middle East are major suppliers of oil, gas, urea, and other products, with a substantial portion shipped via the Strait of Hormuz, geopolitical tensions since late February have pushed up prices. As of March 6, the CFR urea price in Southeast Asia reached $510 per ton, up 23% from early 2026 and 7% from late February. International refining margins have widened notably. Higher nitrogen fertilizer and refined product prices are favorable for U.S. gas-based urea and refining operations. In the medium term, rising soybean prices may boost demand for amino acids, while upstream segments of the new energy sector are also positioned to benefit.
Risks include uncertainty over the duration of geopolitical conflicts, sharp fluctuations in crude oil prices, and potential obstacles in passing through chemical price increases if demand declines rapidly.
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