The Virtual Blockade of the Strait of Hormuz
The Strait of Hormuz, a 55-kilometer maritime channel between Iran and Oman, serves as a vital artery for the transit of approximately 30% of the world’s naphtha. According to a report by Conventus Law, the ongoing conflict in the Persian Gulf has generated a virtual blockade of this strategic passage, with immediate consequences for the supply chain of plastic materials in Asia. The disruption is not due to a physical blockade, but to an exponential increase in insurance and navigation costs, which has made transit impractical for many ships. The flow of naphtha, essential for the production of polyethylene and polypropylene, has decreased by 28% compared to the average monthly figure for April 2026. This has triggered a series of chain reactions in the manufacturing sectors most dependent on oil.
The crisis is not an isolated event, but the result of a convergence of factors: geopolitical tension, the fragility of maritime routes, and the structural dependence of East Asia on petrochemical feedstocks. The route from Abadan to Yokohama, which normally transports 2.3 million tons of naphtha per month, has seen a 41% decrease in the last three weeks. This has not only increased prices, but has also caused delays in the delivery of materials for the electronics and medical industries. The effect has been particularly evident in Japan, where three food packaging factories have reduced production by 35% due to a lack of raw materials.
The Petrochemical Supply Chain Bottleneck
Naphtha is a derivative of crude oil, primarily produced in Iran, Saudi Arabia, and Kuwait. Its transportation is carried out by 100,000-ton tankers, which navigate the Strait of Hormuz at an average speed of 12 knots. The virtual blockade has made an alternative connection necessary: transportation by land from Dubai to Baku, then by rail to Central Europe, with an additional cost of $18 per barrel. This route, 3,200 kilometers long, takes 14 days of travel compared to the normal 4 days, with an increased risk of interruption due to technical failures or security interventions.
Storage infrastructure in Japan and South Korea is designed for 45 days of self-sufficiency. With the decline in deliveries, the storage level has dropped from 72% to 41% in less than two weeks. The production capacity of the Yokohama refineries, which operates at a level of 230,000 barrels per day, has been reduced by 30% to limit the consumption of naphtha. The repair time for a transport pump in a storage facility is 3 days, but the lack of spare parts on site has extended the downtime to 8 days. This has created a collapse in production capacity that cannot be compensated by an increase in local production, given the lack of sufficient refineries.
Who Pays and Who Benefits
The costs of the crisis have been primarily absorbed by manufacturing companies. In Japan, the average profit margins in the packaging sector fell from 12% to 4% in one month. Companies like Sumitomo Chemical increased prices by 22% to maintain cost coverage, but lost 15% of orders due to reduced demand. In South Korea, Samsung Electronics had to postpone the production of 1.2 million units of electronic devices due to a lack of plastic packaging. The ports of Busan and Incheon recorded a 33% decrease in container traffic for plastic goods.
Conversely, companies that produce alternative materials have seen an increase in revenue. Graphite One, which recently signed an agreement with CN for the development of active anodes in Ohio, increased its market value by 28% in a week. The production of natural graphite anodes, which is not dependent on oil, has grown by 40% in one month. In Japan, the company GreenPlast received $45 million in funding from the government to develop a polymer biodegradation process. The energy efficiency of this process is 1.8 MJ per kilogram of plastic produced, compared to 4.5 MJ for the traditional method.
Closure
The virtual blockade of the Strait of Hormuz has accelerated a process that was already underway: the decoupling of East Asia from the petrochemical cycle. The naphtha crisis has demonstrated that dependence on fossil feedstocks is not only an economic risk, but a physical constraint that can be interrupted in a few days. The coming months will need to monitor two key indicators: the level of naphtha storage in the ports of Yokohama and Busan, and the growth rate of production capacities for circular materials in Japan and South Korea. If the former remains below 45%, the pressure on prices will increase. If the latter exceeds 25% per year, there will be a structural transition towards an economy less dependent on oil. The point of no return is not the crisis, but the choice to invest in real alternatives, not just theoretical ones.
Photo by Federico Beccari on Unsplash
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