The Iran conflict is causing a sharp rise in prices for key chemical raw materials, with naphtha and urea up 67% and 48% respectively, according to Spanish chemical association QUIMACOVA. This disruption threatens supply chains for plastics, fertilizers, and daily-use products, directly impacting European importers and downstream industries.
Supply-chain impact
The closure of the Strait of Hormuz has severely disrupted the supply of naphtha and urea, essential feedstocks for plastics, textiles, hygiene products, and fertilizers. QUIMACOVA reports that naphtha prices have surged 67% and urea 48%, based on data from FEIQUE, the Spanish chemical industry federation. These increases are already translating into higher costs for finished goods, from packaging to food.
Freight and insurance cost escalation
FEIQUE notes that freight costs have risen by $3,000 to $4,000 per container, with insurance premiums also climbing depending on shipping routes. These logistics pressures compound the raw material price hikes, creating additional burdens for chemical buyers and traders relying on Middle Eastern imports.
Energy cost burden on industry
The conflict has driven up natural gas and electricity prices, resulting in an estimated €6 million energy cost increase for the Valencian chemical industry from February to March 2026 alone. The final impact will vary by company depending on energy hedging and ability to pass costs along the value chain, according to FEIQUE.
What buyers should watch
Importers and distributors should monitor the evolving geopolitical situation in Iran and its effect on Strait of Hormuz shipping. Price volatility for naphtha and urea is expected to persist, potentially affecting contract negotiations and inventory planning. Additionally, the diversion of chemicals from China into the EU market, particularly in organic chemicals, fertilizers, pigments, plastics, and fluorinated gases, adds another layer of supply-chain complexity.
China sourcing context
QUIMACOVA highlights that China remains the primary source of risk for diverted chemical products entering the EU, especially in segments like organic chemicals, fertilizers, and plastics. This trend may pressure European producers and alter competitive dynamics for overseas buyers sourcing from both China and Europe.
Source: Read the original report | Published: April 15, 2026