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Iran-Israel conflict sparks oil spike, feedstock strain for chemicals

Natural gas and crude oil are foundational inputs for the global chemical industry, serving as critical feedstocks to produce key intermediates such as ethylene, propylene, methanol, aromatics, and their derivatives. Iran’s temporary shutdown of part of the South Pars field the largest natural gas field globally following Israeli attacks has raised alarm regarding near-term availability of condensates, ethane, and LPG. These components are essential to steam crackers and methanol units across Asia and Europe.

Similarly, Israel’s decision to halt over ** per cent of its natural gas output due to security risks, including the shutdown of the Leviathan offshore field, further compounds the risk of regional feedstock constraints.