Iran Conflict Could Disrupt Markets For Everything From Plastics To Fertilizers

Tensions in the Middle East often trigger concerns about rising gasoline prices. But disruptions to oil supplies could affect much more than the cost of filling up a car. That’s because crude oil is not only burned as fuel. It is also the raw material for thousands of products that modern societies depend on, including plastics, fertilizers, clothing fibers, medicines and electronics.

As a biochemist, I’m interested in how certain chemicals can shape society, and oil is a prime example.

The stakes become clearer when looking at the Strait of Hormuz, a narrow waterway between Iran and Oman. About one-fifth of the world’s petroleum liquids consumption passes through the strait each day, making it one of the most important oil shipping routes on Earth. If conflict significantly disrupts traffic there, the effects could ripple far beyond energy markets.

Oil is a chemical starting point

Crude oil is a complex mixture of hydrocarbons – molecules made mainly of carbon and hydrogen. Refineries and chemical plants separate and transform these molecules into smaller chemical building blocks known as petrochemicals.

Some of the most important petrochemical building blocks include chemicals such as ethylene, propylene and benzene. Manufacturers can then convert these building blocks into more complex forms, which make up plastics, solvents, synthetic rubber and other industrial materials.

While fuel is a well-known product, fuels actually represents only a portion of what is produced from crude oil. The refining process generates a wide range of petroleum-based materials used to manufacture everyday items, such as plastics, medicines, electronics, cosmetics, clothing fibers and household goods.

Plastics that shape modern life

One of the most visible uses of oil is the production of plastics. Scientists can link individual petrochemical molecules to form polymers, which are long chains of repeating units that create materials such as polyethylene, polypropylene and polystyrene.

Because plastics are lightweight, durable and relatively inexpensive, they have become essential to global manufacturing.

These plastics appear in countless products, including food packaging and water bottles; medical equipment, such as syringes and IV bags; electronics casings and appliances; automotive parts; and construction materials, such as pipes and insulation.

Even technologies designed to reduce carbon emissions depend on them. Wind turbines, solar panels and electric vehicles all contain plastic components derived from petrochemicals.

Fertilizer that feeds billions

Oil and natural gas also play a critical role in agriculture. Modern fertilizers rely on nitrogen compounds, such as ammonia. Ammonia is produced through the Haber-Bosch process, which uses hydrogen typically derived from natural gas or other fossil fuels.

These fertilizers replenish nutrients in soil and dramatically increase crop yields. Without them, global food production would be far lower. Petrochemicals are also used to produce pesticides, herbicides and plastics used in irrigation systems and agricultural equipment.

Clothing, cosmetics and medicines

Petrochemicals also appear in many everyday consumer goods. Synthetic fabrics, such as polyester, nylon and acrylic, are made from petrochemical feedstocks. These feedstocks are the basic chemicals, made from crude oil or natural gas, that serve as the starting ingredients for products widely used in clothing, carpets and furniture.

Petroleum-derived ingredients are also common in cosmetics and personal care products. Certain lotions, shampoos and lipsticks rely on these compounds because they help stabilize formulas and extend shelf life.

Petrochemicals are also important in medicine. Petroleum-derived chemical intermediates − compounds made during the process of turning raw materials into a final product − are used to manufacture pharmaceuticals, medical tubing, sterile packaging and disposable gloves.

These materials help hospitals maintain sterility and safety in health care environments.

Why the Strait of Hormuz matters

Because oil and petrochemical feedstocks move through global shipping routes, disruptions in one region will affect supply chains worldwide. The Strait of Hormuz is particularly important. If conflict or political tensions continue to interrupt shipping through the Strait, oil prices will rise quickly. Energy analysts have long warned that disruptions to the strait could send shock waves through global markets. The impact would not be limited to transportation fuels.

Petrochemical industries depend on steady supplies of crude oil and natural gas liquids as raw materials. If those supplies become more expensive or harder to obtain, manufacturers could face higher production costs.

The proportion of crude oil used for petrochemical feedstocks to create plastics, fertilizers and other materials represents around 10% to 20% of oil consumption. Most crude oil is refined for fuel production, including gasoline, diesel and jet fuel, so these fuel supply chains would likely be the first to take a hit. But over time, disruptions could affect the availability and price of products ranging from plastics and packaging to fertilizers, synthetic clothing fibers and even food.

A hidden foundation of modern economies

Because petrochemicals are often used behind the scenes as ingredients rather than finished products, the connection many agricultural, medical and consumer goods have to oil is easy to overlook. Yet, petrochemicals form a hidden foundation for modern economies. They enable large-scale agriculture, advanced health care systems and global manufacturing supply chains.

At the same time, concerns about climate change and plastic pollution are driving research into alternatives. Scientists are developing bio-based plastics made from plant materials, improving recycling technologies and exploring new ways to produce fertilizers with lower carbon emissions.

For now, the modern world remains deeply dependent on oil, not only for energy but also for the materials that shape everyday life. When news headlines focus on disruptions to oil supply, the consequences may extend far beyond the gas pump, affecting the products that underpin modern society.

(Published under Creative Commons from The Conversation)