Worried about the upcoming Strait of Hormuz inflation? The global economy has one word for you: Plastic

The price of naphtha may not keep you up at night considering the inflation that is yet to hit the economy from the US-Iran war and the closure of the Strait of Hormuz, but perhaps it should.

As gas prices go up together crude oilthe cost of petroleum products – petrochemicals – is also rising, and may ultimately have a greater impact on consumers than the price of gas.

The list of petrochemicals sounds like a high school chemistry class guide: benzene, butadiene, ammonia, styrene, naphtha and many other petroleum products. Known as feedstocks in industry parlance, they find their way into everything in your life, from hospital gloves to pasta wrappers. And the cost of these chemicals is rising even if consumers don’t realize it for a while.

But Stanislav Krykun, CEO of DST-Pack, a packaging company based in Poland, is already seeing it on the factory floor. “Our plastic suppliers in China have raised prices by about 15% recently, and have pointed to higher raw material costs and general market volatility as the reason,” Krykun said.

The Krykun factory produces packages for companies around the world, including the US, and you can see now what customers will see later: increased prices.

Most people don’t focus on Advent calendars now – those chocolates hidden under perforated punch-outs to celebrate each day of the season. But Krykun is thinking about it.

Orders are already increasing for the 2026 Christmas holiday season, and these calendars often include molded plastic trays inside, and these will be very expensive.

“We are currently working with many customers on the production of Advent calendars, many of whom are at the stage of sampling or pre-production. Due to recent developments, we had to restore the costs for many of these projects specifically due to the increase in the price of plastic, which directly affects the cost of these materials,” Krykun said.

Another important thing to understand is that the effect of this price increase is not immediate. “It’s slow,” Krykun said. Companies that had already confirmed production and locked in prices for future shipments were still able to continue at previous cost levels. “However, all the new orders placed in the last few weeks are already being quoted at higher prices,” Krykun said.

“Packages should be produced, sent to the manufacturer, filled with the product, and then distributed only to sell. So any price changes tend to be reflected in the tables with a lag instead of immediately,” Krykun added.

Billions of dollars in everyday goods will be affected

When the lag ends, the impact will be felt more everywhere and in everything.

“The use of petrochemicals is extensive and, in fact, affects everything we use and use. It would be difficult to know something that did not contain oil or natural gas unless it was built entirely of wood,” said Tom Seng, assistant professor of energy finance at the Ralph Lowe Energy Institute of Texas Christian University. “The amount of plastic used in the manufacture of cars and trucks alone is huge,” he added.

Of the 193 active petrochemical complexes in the Middle East, about 79% are in Saudi Arabia, Iran and Qatar alone, with Saudi Arabia alone representing 75% of production capacity.

He added that the Gulf Cooperation Council States – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – collectively produce about 12% of the world’s chemicals, or 150 million tons per year.

All of those petrochemical companies almost exclusively depend on the Strait of Hormuz to export their product.

“There are a lot of day-to-day things that will be affected,” said Jeff Krimmel, founder of the energy firm Krimmel Strategy Group.

Krimmel said that petrochemical shortages and price increases will affect textiles, detergents, food and beverages.

“Most of the world is packaged and transported in different types of plastic,” Krimmel said.

All those plastics are derived from oil-derived feedstocks, such as naphtha, propylene, methanol, ammonia and styrene. Although there are other products available elsewhere, the oil fields of the Middle East are the top source of naphtha and there is no substitute.

“Naphtha is very important, it’s a richer, water-based feedstock with a slate of lower economic results,” Krimmel said.

Even if the war stops immediately, it will take time to get supply and demand back to normal. The longer the enmity lasts, the more difficult it will be. So, no customer should be breathing too soon, Krimmel said.

The higher the consumer price, the lower the monetary pressure

Atsi Sheth, the chief credit officer of Moody’s Ratings, says that this is the latest shock for the petrochemical industry that has seen several in recent years, from Covid to Ukraine to the Red Sea issues and now the Strait of Hormuz. He said that the most surprising thing is that China is increasing its production of petrochemicals, and that the oil companies of the world, when they felt the opportunities of direct integration, began to produce more.

“Moody’s has been shouting that there is a supply scare – too much supply, not enough demand,” Sheth said. As a result, Moody’s has taken several measures to reduce the burden on producers, because the excess supply is consuming the lungs and the ability to pay the debt is decreasing. But once current stocks are depleted, tensions will quickly turn in the other direction, and the expectation is that inflation will rise as the year progresses.

“The interpretation we are making is that this will eventually feed into the price of the consumer. Food, clothing and other goods for sale will hit those at the end of the income scale,” Sheth said.

Peter Swartz, chief scientific officer and co-founder of supply-side analytics company Altana, said the market is now price volatile and the long-term effects will include price increases regardless of what happens on the battlefield. “The long-term effect is here. Every business is now planning for an uncertain future and investing in diversification, and that increases costs,” said Swartz.

There is a multiplier effect following a move to the petrochemical market like the one that is happening now, because petrochemical products go into tens of billions of dollars of goods that now go into tens of trillions of other goods – all based on the same petrochemical soup. “There is no magic replacement for these products,” Swartz said.

Altana’s data shows that crude products include $733 billion of petrochemicals, intermediates, and finished products combined – 22% of the world’s total supply including ethylene, propylene, butadiene, benzene, toluene, xylenes, methanol, glycol, MTBE, epoxides, acetic acid, Pletrik, acrylic, acetic and acetic acid, acrylic Kou. This has an impact on less than $3.8 trillion in goods, from toothpaste to towels.

In the meantime, Krykun watches the instability for its plastic packaging with alarm, and, at least, consumers will notice less packaging but not cheaper. He said: “We are seeing products make very practical changes. For example, a skincare brand can go from a complex box structure to a simple one. A mobile device brand can reduce the internal packaging components or redesign the shape to use less fabric.

“Even for products like boxed chocolate, the products simplify the interior design or construction in general to control costs,” Krykun said.

But time is not on the manufacturers’ side.

“Reducing the complexity of packages or redesigning the architecture is not an immediate process — it often requires development work, testing, and approval cycles that can last weeks or months,” Krykun said.

In many cases, manufacturers don’t have enough time to repackage before their next production starts. As a result, they are often forced to place the next bulk order at higher prices while simultaneously dealing with equally costly packaging solutions.