International oil companies have ceased some of their operations in the conflict zone between Iran and the United States, allied with Israel. However, their profitability could be maintained due to rising oil and gas prices on the international market.
The situation is different for downstream manufacturing industries. For the production of certain products (ammonia, nylon), gas represents 80% of the variable production cost. The price of gas has more than doubled since the start of hostilities. These costs are then passed on to downstream sectors; for example, the increase in fertilizer costs affects the agricultural sector.
The rise in oil prices is worsening polymer production conditions, and four industrial groups have already declared cases of "force majeure" in Europe:
- Ineos (United Kingdom): a site in Lavera (13) and in Sarralbe (57);
- LyondellBasell (United States): a site in Berre-l'Etang (13), in Fos sur Mer (13) and Oyonnax (01);
- Indorama (Indonesia): a site in Longlaville (54) and in Verdun (55). The first site is already in the process of closing down.
The fourth, Sabic (Saudi Arabia) has sites in Benelux, Germany and the United Kingdom.
The Elipso association (European manufacturers of plastic packaging) contested the invocation of force majeure because, according to them, the increase in production costs would not legally constitute a case of force majeure (the four manufacturers also mention disruptions in the supply chain).
While European industries are facing significant challenges, the US petrochemical industry, relying on local shale gas at prices unaffected by global market fluctuations, is increasing its exports to Europe (already up 29% since 2019) and, in the current context, could strengthen its competitive advantage. Consequently, the downgrading of some European steam cracking plants is a concern. Furthermore, China, which until now had acted as a buffer supplier for Europe, has prioritized its domestic market and reduced its sales to Europe (albeit at more volatile prices).
Another resource concerning the European petrochemical industry is the reallocation of available naphtha to fuel production (hence rumors of impending shortages). In short, a choice may have to be made between plastic and a full tank of fuel.
Furthermore, maritime freight (80% of world trade transits by sea) is becoming more expensive due to the cost of energy and longer journeys. Freight prices between Europe and China have tripled (meaning they are more expensive, but not necessarily cheap – consider the conditions of seafarers and the environmental costs).
As a domino effect, the consequences of the conflict in the Middle East are expected to affect all industrial sectors. The prevailing narrative remains one of cautious "optimism," with weak growth projected for 2026 (likely less than 1%), in a situation no more dramatic than in 2025. However, the beginning of the year was characterized by weak consumption and investment (zero growth in the first quarter), and the overall situation has hardly improved, as we have seen previously in key industrial sectors. Certainly, political authorities are unlikely to announce days of deep crisis for fear of precipitating them. Nevertheless, many factors suggest that even assuming an end to the conflict in the Middle East, it will take time to restart the flow of goods and energy.
The current situation demonstrates that the issue of liquid hydrocarbons and gas is not simply a matter of energy; the chemical, pharmaceutical, plastics, and many other industries are deeply dependent on them. These industries are now on the front lines of the shockwave propagated by the imperialist war in the Middle East. While this weakens Asia and Europe, it immediately gives a competitive advantage to the United States, a major producer of gas and oil, thus paving the way for new power dynamics among the sector's monopolies worldwide.