The Middle East conflict has spread to clothing, bread, trash bags... It's not just "oil" prices that are rising.

Ask AI · How is the situation in the Middle East driving up the prices of everyday goods like clothing?

This article is reproduced from 【CCTV Finance】;

The current round of tensions in the Middle East has already lasted more than a month. Transit through the Strait of Hormuz has been obstructed, triggering a surge in energy prices and rippling through every production link, impacting global supply chains.

What impact does the tense situation in the Middle East have on various sectors such as energy, chemicals, logistics, agriculture, and finance? If the obstruction of transit through the Strait of Hormuz becomes prolonged, what cascading effects will it trigger?

A blockade of the Strait of Hormuz tears open a gap in crude oil supply

Volatility in the global energy market intensifies

Daily shortfall of 10 million to 16 million barrels! The world’s energy “main artery” is in trouble

CCTV correspondent Gao Yan: The Strait of Hormuz is the choke point for global oil supply. According to the International Energy Agency—IEA—the 《Oil Market Report》 released by IEA in March this year states that in all of 2025, the Strait of Hormuz will transport a total of about 20 million barrels per day of crude oil and refined products, accounting for 25% of global seaborne oil trade; at the same time, it also carries about 20% of the world’s LNG, serving as a core passage for natural gas exports from Gulf countries such as Qatar and the UAE.

From the flow perspective, over 70% of the oil from this strait is shipped to the Asian market. The shares of crude oil imported through this route are 90% for Japan and 95% for South Korea, respectively. IEA estimates that as of the end of March, the obstruction of transit through the Strait of Hormuz has led to a global daily crude oil supply gap of 10 million to 16 million barrels.

Releasing strategic oil reserves cannot curb the rapid rise in international oil prices

Although the IEA launched last month the largest strategic oil reserve release plan in history, with a total scale of more than 400 million barrels, it still cannot curb the rapid rise in international oil prices. Brent crude and New York light sweet crude futures are currently at high levels, up at least 60% compared with before the outbreak of the conflict. European Dutch TTF natural gas futures for the front-month contract recently once peaked at 69 euros per megawatt-hour, double the level before the conflict.

CCTV correspondent Gao Yan: In a research report released recently, international credit rating agency Fitch pointed out that if the Middle East conflict continues through the end of June this year, the world economy will grow 0.8 percentage points less in full-year 2024. The report expects that the U.S. 2026 real GDP growth rate will fall from the recent forecast of 2.2% to 1.5%, while the euro area’s economic growth rate this year will drop from the earlier forecast of 1.3% to growth of less than 1%. Emerging market countries will generally face challenges such as disrupted supply chains and rising debt risks.

Synthetic fiber prices rise, prompting flexible production scheduling at chemical fiber companies

My country’s textile industry occupies a leading position globally. As synthetic fibers—the core raw material for the textile industry—prices are directly linked to crude oil, what impact has the outbreak of the conflict between the U.S., Israel, and Iran had on domestic chemical fiber companies’ production?

CCTV correspondent Yang Zixi: As crude oil rises and drives up synthetic fiber prices, the overall polyester price has risen by more than 10% over the past month.

A person in charge of a chemical fiber enterprise in Shengze Town, Suzhou, Jiangsu, said that the factory is currently operating at full capacity, with orders on hand scheduled 30 days out. However, because chemical fiber products cannot do without basic chemical raw materials derived from oil refining, each round of crude oil price increases is reflected directly in the company’s production process.

From the overall market perspective, synthetic fibers have seen increases to varying degrees. For example, one major product category of polyester—polyester filament—rose from about RMB 7,180 per ton in March this year to RMB 9,300 per ton. Polyamide, across multiple varieties, saw week-on-week gains of more than 6%, and some models jumped by RMB 2,000 per ton in a single day.

Some companies say they will not easily cut production lines for now: first, downstream demand for continuing purchases remains; second, shutting down and restarting would incur greater losses. They are also offsetting the risk of price volatility through dynamic inventory management and by increasing purchases of different raw material varieties.

Raw material price fluctuations prompt apparel fabric companies to adjust quotes in real time

For textile companies, chemical fiber is a basic raw material for producing fabrics, accounting for more than 60% of a fabric’s total cost. Keqiao, Zhejiang is the world’s largest textile trading and distribution center. A merchant, Ma Ziyi, from the China Light Textile City, told reporters that the company organizes production according to orders. Many contracts for the year have already been signed ahead of time, so losses from raw material price increases for these orders can only be borne by the company itself.

Yang Wei, general manager of Zhejiang Jinchanzebuy Art Co., Ltd., said their company has not passed the price increases on to downstream customers for now. Instead, they are using strategies such as stocking in advance, adjusting supply, and shortening delivery times, while also accelerating differentiated R&D of fabrics to strengthen their bargaining power.

Responding to cost pressure, textile export businesses adjust raw materials and market layout

Cost pressure caused by rising crude oil prices will be transmitted gradually down the textile supply chain to downstream sectors.

Lou Qiaoping, a merchant who sells sun-protection clothing at the Yiwu International Trade City, explained that the sun-protection clothing in the store has a nylon content of over 85%. In addition to raw material price hikes recently, they are also facing a shortage of supply—many orders cannot be fully fulfilled by upstream factories.

Meanwhile, some companies producing new Chinese-style garments say that the main content of ready-made garment raw materials is natural fibers, with a relatively lower share of chemical fibers, which gives the companies some buffer space.

He Rong, general manager of Haining Zhongfang Fabric Technology Co., Ltd., Zhejiang: Some clothing uses chemical fiber materials to create a three-dimensional “throw-flower” effect. A cost increase for one garment is about RMB 5 to RMB 10. If raw materials continue to rise, designers will directly change the chemical fiber materials into artificial silk.

The shadow of “raw material supply disruption” affects global chemical and high-end manufacturing industries

Currently, the impact of the geopolitical tensions in the Middle East is spreading step by step from the energy sector to chemical and high-end manufacturing industry chains.

South Korea: Ethylene prices surge; garbage bags become a scarce item

In Seoul, South Korea, in recent weeks, “Have you been able to buy garbage bags?” has become a somewhat helpless greeting among neighbors in many communities. Affected by the Middle East situation, garbage bags that South Korean people can’t do without have already become “hard to find” items at some supermarkets, and even sold out.

The reason plastic bag prices are rising in South Korea is that the import volume of naphtha has fallen sharply, which has led to a surge in ethylene prices—the key input for producing plastic bags.

Multiple global chemical companies announce price-hike plans one after another

Under the cost pressure brought by this raw material “supply disruption” crisis, in March many chemical companies around the world announced price-hike plans one after another. U.S. chemical giant Dow Chemical increased its polyethylene price increases to twice the level it had previously announced. German Wacker Chemie raised prices across its organosilicon products comprehensively, covering about 2,800 product types.

Qatar’s helium-related facilities are attacked; spot prices surge by more than 50% recently

In addition, the Middle East regional conflict has also turned attention to a colorless, odorless inert gas—helium. Qatar supplies nearly one-third of the world’s helium demand. Because LNG facilities were attacked, helium production lines were damaged, and repairs will take several years. Helium spot prices have already risen by more than 50% recently.

Fertilizer prices rise; the “broken chain” of the Strait of Hormuz hits global agriculture

The cascading effects triggered by the shipping disruption through the Strait of Hormuz not only put pressure on global chemical-related industries, but also—through “fertilizer,” a key agricultural production input—affect global crop production and prices.

The World Food Programme warned that if the conflict situation in the Middle East continues, the number of people whose food security is threatened this year could reach a record high.

How can a single strait drive bread prices?

In this episode, when the Strait of Hormuz was blocked, it simultaneously disrupted natural gas, nitrogen fertilizer production, and global fertilizer shipping routes, forming a triple “raw material—production—transport” broken chain. It almost affects all major staple crop production, directly leading to lower crop yields, adjustments to planting structures, and then triggering “structural food inflation.”

Analysts generally expect that, given that imbalances in fertilizer supply and demand are difficult to ease in the short term and geopolitical risks remain, upward pressure on grain prices globally—such as corn and wheat—will persist for some time.

From suspending operations for hedging to重新 pricing

The Hormuz crisis reshapes global logistics

The Hormuz Strait transit obstruction caused by developments in the Middle East has also dealt a severe blow to global logistics. This situation has already lasted for more than a month. The logistics industry has gradually shifted from the initial “suspension and hedging” approach to “rerouting and diverting” as well as “repricing.”

As shipping routes and transportation modes continue to be adjusted, this shock is also driving the reallocation of risks and returns across the global logistics chain. As the Hormuz crisis continues to intensify, the shipment of crude oil from the Middle East has been impeded; buyers in Asia and Europe are beginning to seek more alternative sources in places such as the United States and West Africa.

Insiders said: “For shipping, it’s as if oil shipments that normally account for 30% of volume can’t get through—because importing countries are urgently looking for oil elsewhere, but the ships aren’t able to be redeployed in time.”

By contrast, air logistics in this crisis is even more complex. On the one hand, after sea routes are blocked, some high-efficiency, high-value goods shift to air transport directly raising freight rates. On the other hand, although air transport prices rise, aviation logistics companies also face multiple pressures such as soaring fuel costs. Right now, there are no signs that the regional conflict will end, and the restructuring of this logistics chain is still ongoing.