Middle East conflict fuels sharp oil and petrochemical price spikes

Rising tensions between the United States and Iran, together with Houthi attacks on Saudi vessels in the Red Sea, have pushed crude and key petrochemical feedstock prices sharply higher. Brent and WTI futures climbed toward $100 a barrel in July before easing back to the mid‑$80s, while European naphtha, Rotterdam benzene and US Gulf ethylene all recorded percentage gains of 30‑40% over a few weeks.

The Red Sea disruption has forced Saudi oil exports to rely on longer routes, prompting a tentative 60‑day agreement to reopen the waterway under a north‑south lane system. Meanwhile US crude inventories showed a modest build, with Cushing stocks rising by 2.4 million barrels, the largest increase since March, and product draws of gasoline and distillates reflecting ongoing market volatility.

These developments have left refiners and converters scrambling to manage feedstock costs that now fluctuate more with geopolitical headlines than with traditional supply‑demand fundamentals.