BUSINESS

Middle East Conflict Ripples Through China’s Chemical Markets

Published: Mar. 5, 2026 11:17 p.m. GMT+8

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A ship-to-ship bunkering operation for green methanol at Qingdao Port in Shandong province, March 2, 2026. Photo: VCG

The Middle East conflict is driving up prices of methanol and other chemicals in China as geopolitical tensions fuel concerns over supply disruptions.

The region — particularly Iran — is a major supplier of basic chemicals. Any disruption in the Strait of Hormuz could tighten global supply chains and pressure import-dependent markets such as China’s chemical sector.

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Middle East conflict has raised methanol and chemical prices in China due to fears of supply disruptions, especially through the Strait of Hormuz.
In 2025, China imported 14.4 million tons of methanol, with 69.4% from the Middle East; Iran is its main foreign supplier.
Alternative supply options are limited, while domestic production rates rose to 87.4% in late February; prices of other feedstocks and chemicals also increased.

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Who’s Who

Oilchem.net: Oilchem.net is a commodities data provider. According to their data, China imported 14.4 million tons of methanol in 2025, with 10 million tons (69.4%) originating from the Middle East. Oilchem.net analyst Zhao Chengcheng highlighted that most Middle Eastern methanol export terminals are within the Persian Gulf, making shipments vulnerable to Strait of Hormuz disruptions. The provider also reported a more than 5% jump in straight-run naphtha prices in Shandong province on March 4.

Kpler: Kpler is a shipping data provider. According to their data for 2025, methanol shipments through the Strait of Hormuz accounted for 32% of global trade. This highlights the strait's critical role in the global methanol supply chain.

Baocheng Futures Co. Ltd.: According to Baocheng Futures Co. Ltd., China's methanol plant operating rate averaged 87.4% in the week ending February 27, an increase of 8.7 percentage points from the previous year. This information suggests that strong domestic production could mitigate the impact of declining Iranian methanol imports.

QatarEnergy: QatarEnergy announced on March 3 that it would halt the production of several downstream products, including urea, polymers, methanol, and aluminum. This decision came after military strikes caused damage to its industrial facilities.

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