The war in Iran has wreaked havoc in plastics industry supply chains around the world, upending how the chemical ingredients in plastics are sourced, and raised prices for consumers.

President Donald Trump on June 17 signed a preliminary agreement that could potentially end the conflict, but it’s not clear the deal will hold and global disruption is likely to reverberate for months even after the war eventually ends. The war has boosted profits for plastics manufacturers while adding to the costs faced by consumers already battered by rising costs.

Polyethylene, a plastic used in food packaging and other containers, is made from ethane, which is separated out of natural gas. The Middle East accounted for over 40 percent of polyethylene exports in 2025, shipping the polymer ​to nearly every region outside North America, the next largest exporter. The wartime closure of the Strait of Hormuz, where about $20 to $25 billion ‌worth of petrochemical products pass through annually, sent prices for polyethylene and other plastic ingredients soaring.

Stock values for major U.S.-based plastics producers also shot up.  U.S. plastics producers profited off cheap domestic natural gas available from hydraulic fracturing to increase production and raise prices. In the early days of the war, the stocks of chemical companies including CF Industries, LyondellBasell Industries, Dow, and Mosaic were some of the top performers in the S&P 500. Since then, volatility around the war has begun to erode their stock values, with some gains erased.

Patrick Penfield, a professor of supply chain practice at Syracuse University, said U.S.-based chemical manufacturers have emerged as clear beneficiaries of the Middle East conflict due to their access to natural gas as a plastics ingredient, rather than an alternative – naphtha – which is derived from crude oil.  

“Companies like Dow and LyondellBasell are running at full capacity and raising prices — and the reason comes down to feedstocks,” said Penfield. “American producers rely on ethane derived from domestic natural gas, insulating them from the supply shock that has crippled competitors overseas. Asian and European manufacturers, by contrast, depend heavily on naphtha — roughly half of which historically flowed through the Strait of Hormuz — leaving them exposed and struggling.”

Penfield said the long-term outlook is more complicated than the current windfall suggests.

“Before the war, the market was already grappling with a plastics oversupply, and several planned U.S. capacity expansions had been cancelled as a result,” said Penfield. “Once the conflict ends and supply chains normalize, the industry will likely revert toward those pre-war dynamics rather than sustaining today's elevated margins.”

Penfield said that on the consumer side, price increases for products containing plastics, ranging from trash bags to automotive parts, will deepen the longer the conflict continues.

“History offers little comfort here,” he said. “Manufactured goods prices rarely retreat once they rise, unless aggressive competition forces sellers' hands.”

Jack Buffington, Director of the Supply Chain Program at the University of Denver, said price and supply shocks are already happening in Asian nations. In Japan, some consumer goods companies are removing colors from food packaging to conserve ink and reduce reliance on oil-based naphtha.

“Most people can’t fathom how deeply this penetrates modern society and the impacts that will hit later in the year, even if the war ended today,” Buffington said.

Buffington said that while the cost to U.S. consumers for plastics packaging will rise, he’s most concerned about medical supplies, many of which are currently sourced in Asia. He foresees potential shortages of supplies down the road. Buffington said the plastics supply chain needs controls in place to weather these storms, but instead tariffs and geopolitics have weakened the global supply chain.

“The only thing that could make this worse is a major global pandemic,” Buffington said. “If we had another COVID sort of event, who knows what would happen.”

According to Rachel A. Meidl, the deputy director of the Center for Energy Studies at Rice University’s Baker Institute, the war in the Middle East is a real-time stress test of global chemical feedstocks and the plastics manufacturing system.

“Countries that rely heavily on Middle Eastern oil and petrochemicals are increasingly confronting a materials security challenge,” said Meidl. “For countries whose petrochemical sectors depend heavily on imported naphtha, the disruption serves as a reminder of how vulnerable critical manufacturing inputs can be to geopolitical events far beyond their borders.”

Meidl said the larger lesson is that this crisis isn’t only one of energy security, but also materials security. She believes the companies best positioned for the future will be those that can access carbon-based ingredients from a wider range of sources, including fossil, recycled, and biogenic sources.

Meidl said that while the structural feedstock advantages in the U.S. in the wake of the Iran conflict may lead to some additional plastics manufacturing capacity being built, companies remain mindful of recent periods of oversupply, high capital costs, and lengthy permitting timelines.

“As a result, future investments are likely to be more strategic and selective, focused on strengthening the reliability and competitiveness of the supply chain rather than simply expanding production capacity,” said Meidl.

Greenpeace is highlighting the U.S. plastic industry’s war-time expansion to illustrate how fossil fuel interests, aided by current friendly government oversight and expensive lobbying efforts, use global crises to advance their interests and further enmesh themselves into society’s fabric.  

Over the last 75 years, plastics production has shot up dramatically, from two million metric tons to over 450 million metric tons, with packaging accounting for approximately 42 percent of all global plastics. 

An international effort to work out a treaty to control plastics industry growth last year failed, in part because of the industry’s political influence.

“It’s outrageous that a relative handful of countries with a vested interest in seeing plastics production increase have been able to derail the entire process, which currently seeks consensus to progress,” said Environmental Investigation Agency Ocean Campaign leader Christina Dixon. “Coalitions of countries can instead band together and bend the curve to dramatically impact plastic pollution and climate emissions, even without everyone on board.”