The Strait will reopen. No war. For now. Iran will be charging fees for passage through the Strait. The Chinese will end up with the lion’s share of those fee charges. This could set up a world war with the US and China against Iran. The Chinese will have to decide to be the bad guys. Why should we pay in anyway to be the bad guys any longer? How long Iran can charge the Chinese and Indians should be interesting. There is some math that says paying fees for the passage of oil and other products prices their production out of the global market. It is unaffordable.
What I am writing about the bill or the inflation has not been seen yet. We are short plastics for a few years to come. We are short oil and NG until sometime in 2027.
Yes, severe physical shortages of both oil and plastic remain an ongoing global reality, and experts warn it will take months—and in some areas, years—for supplies to fully recover. [1, 2, 3, 4, 5]
While the peace agreement has lowered the financial cost of oil on paper, it does not instantly put physical barrels into factories or refineries. The four-month war completely drained global emergency stockpiles, creating a massive physical deficit that a paper treaty cannot immediately fix. [2, 6, 7, 8, 9]
The physical shortages persist for several critical reasons: [5, 10]
1. The Global Oil Deficit is at a 23-Year Low [11]
To keep the global economy from collapsing during the blockade of the Strait of Hormuz, countries aggressively drained their safety nets: [1, 7, 12]
- Exhausted Safety Reserves: The U.S. Strategic Petroleum Reserve (SPR) was drawn down to 357 million barrels, its lowest level since 1983. [7, 13]
- Multi-Decade Global Lows: The U.S. Energy Information Administration (EIA) confirmed that total oil stockpiles across the world’s largest economies (OECD) are heading toward their lowest physical levels since 2003. [6]
- The Refill Bottleneck: Every drop of oil that now comes out of the reopened strait will initially be swallowed up just to restock these depleted emergency reserves, leaving less immediate supply for the commercial market. [7, 14]
2. The Naphtha “Flour” Crisis is Starving the Plastics Industry [15, 16]
The plastic shortage is actually a petrochemical feedstock shortage. Plastic is made from naphtha, a crude oil derivative often called the “flour” of global manufacturing. Because the Middle East is the primary supplier of global naphtha, the blockade choked off plastic factories worldwide—especially in Asia: [10, 17, 18, 19, 20]
- Production Cuts: Major chemical plants in South Korea and Japan have been forced to heavily slice their polymer outputs because they physically ran out of raw chemical feedstocks. [17, 19]
- Extreme Packaging Rationing: The lack of naphtha-based inks and resins forced consumer giants (like Japan’s snack manufacturer Calbee) to completely strip color from product packaging to conserve plastic resources. [19]
- A Long Lag for Polymers: According to reports by UN Trade and Development (UNCTAD), the price of common packaging resins like Polyethylene (PE) exploded by 70% to 80% during the war. Because chemical cracking plants take weeks to safely ramp up production, plastic packaging, medical consumables, and automotive components will remain in short supply through the rest of 2026. [5, 18, 21, 22, 23]
3. Damaged Infrastructure and Logistical Lag
Even if the 30-day mine-clearing process goes perfectly, the oil industry cannot just flip a switch to resume normal output. [2, 24, 25]
- Damaged Facilities: International Energy Agency (IEA) Executive Director Fatih Birol noted that over 80 energy facilities in the region were physically damaged during the military conflict. Repairing these extraction fields and pipelines could take up to two years. [24]
- Shut-In Oil Fields: Oil fields that were completely shut down during the blockade require specialized maintenance to restart. Analysts at S&P Global estimate it will take anywhere from 10 weeks to seven months just to get these idle wells back to pre-war output levels. [24, 26]
If you would like more specific details, let me know if you are interested in:
- How this material shortage is affecting specific consumer brands or tech companies
- The timeline for how the U.S. plans to refill its Strategic Petroleum Reserve
- The impact of these shortages on global food supply and fertilizer production [27]
[5] https://voiceofplastic.com
[9] https://www.tradingview.com
[10] https://thewatchdogonline.com
[13] https://fortune.com
[15] https://discoveryalert.com.au
[16] https://www.ukiahdailyjournal.com
[18] https://fortune.com
[20] https://www.cnbc.com
[21] https://unctad.org