Hengyi Petrochemical, a major Chinese private-sector oil products and chemical manufacturer, reported a nearly 40-fold surge in first-quarter profit, driven by sharp price increases following the Iran war and the effective closure of the Strait of Hormuz. The development signals significant supply-chain disruptions for overseas buyers of petrochemicals and refined products.
Profit surge and market context
Hengyi's first-quarter profit jumped nearly 40-fold year-on-year, according to a company statement. The dramatic increase was attributed to rising prices of key products amid geopolitical turmoil. The Iran war and the Strait of Hormuz closure have tightened global supply of crude oil and petrochemical feedstocks, benefiting producers with secured feedstock access.
Supply-chain impact
Hengyi operates a major refinery and petrochemical complex in Brunei, which provides it with feedstock advantages independent of Strait of Hormuz shipping lanes. This strategic positioning allowed the company to capture higher margins while many competitors faced supply constraints. The Brunei plant's output includes paraxylene, benzene, and other key chemical intermediates.
What buyers should watch
Overseas importers of paraxylene, purified terephthalic acid (PTA), and other polyester-chain chemicals should monitor Hengyi's production levels and export availability. The company's Brunei facility may increase output to capitalize on higher global prices, potentially affecting regional supply balances. Buyers should also assess alternative sourcing options as Strait of Hormuz disruptions persist.
China sourcing context
Hengyi's profit surge highlights the uneven impact of the Iran conflict on Chinese chemical producers. While many domestic manufacturers face feedstock shortages and margin compression, vertically integrated producers with overseas assets may gain competitive advantages. This divergence could reshape supply relationships for international buyers sourcing from China.
Source: Read the original report | Published: April 15, 2026