BBC News Arabic reported that shipping through the Strait of Hormuz has been disrupted by the US-Israeli war with Iran. It said this has highlighted the Gulf's role in oil and gas supplies and in the petrochemicals industry.
Abdulwahab al-Saadoun, former secretary general of the Gulf Petrochemicals and Chemicals Association, said some Gulf petrochemical plants shut down completely during the war. He added that some operated at only about 10 percent of their design capacity because shipping through the strait was disrupted.
According to Adnan Mazraei, a researcher at the Peterson Institute for International Economics, the disruption has reduced the availability of some raw materials and raised transport and insurance costs and risk premiums for Gulf states. He said raw material prices rose in some categories by up to 75 percent, and that part of the increase passed through to fertiliser prices and then to food costs. The network reported that diesel prices rose as supplies shrank, that the cost of jet fuel increased, and that the disruption raised concerns about its availability in markets.
Figures cited by the network indicate the size of the sector. In 2023, the six Gulf Cooperation Council (GCC) states exported chemical and petrochemical products worth $64.6 billion. Production capacity reached a record 156.2 million tonnes, or about 6 percent of global output. Saudi Arabia leads petrochemical production in the Gulf and alone supplies about a quarter of globally traded polypropylene. According to Mazraei, petrochemicals account for about a quarter of the manufacturing sector in GCC states but make up only about 4 percent of gross domestic product. He added that the value of oil and gas exports is still far larger than the value of petrochemical exports.
SABIC recorded a net loss of about SAR 25.8 billion in 2025, or about $7 billion. Al-Saadoun links part of the pressure to the price cycle, and part to assets the company bought in Europe that did not return to profitability before it exited them.
Al-Saadoun says that about 85 percent of Gulf production is exported, and that more than half of Gulf petrochemical exports go to Asia, led by China. He described the Gulf industry in this context as “vulnerable to fluctuations in external markets.”
The network reports that China is moving toward self-sufficiency and expanding its capacity in polyethylene, polypropylene and urea. It is also advancing in specialty chemicals, which increases competition for Gulf producers and contributes to a global oversupply. Michal Meidan of the Oxford Institute for Energy Studies summed up China's ambition, saying: “Others depend on China more than China depends on others.” Meanwhile, Gulf producers are investing inside China, including Aramco's joint venture in Fujian, a refining and petrochemicals complex. On the Gulf's steps toward producing specialty chemicals, Al-Saadoun said: “But they are still timid steps.”
In fertilisers, Al-Saadoun says the Gulf produces about 17 percent of the world's nitrogen fertilisers. He adds that about 30 percent of global urea and ammonia trade comes from the region. He said: “If Hormuz closes, this is not just an industrial problem. It is a food security problem.”
On the outlook, Mazraei believes that continued disruption to exports could push buyers in Asia and Europe to seek new suppliers, build larger inventories and bring supply sources closer. He said these shifts could persist after shipping resumes. Iran is the second-largest petrochemicals producer in the region after Saudi Arabia. According to Mazraei, the return of Iranian exports could add more supply to a market already in surplus and put pressure on prices. Al-Saadoun believes that implementing the long-delayed Gulf railway network project is essential, because it could provide alternative routes for transporting products to Red Sea or Mediterranean ports.
In historical context, Kuwait began in 1963 operating the region's first chemical plant producing ammonia and urea. Saudi Arabia issued a royal decree establishing SABIC a year before the start of the main associated gas gathering network in 1977. Al-Saadoun said of the impact of higher oil prices after the 1973 war: “The oil price shock was the turning point. It gave Gulf states the financial capacity to invest in infrastructure that could not have been built before then.”