Plastic Costs Jump 14% to Four-Year High as Iran War Disrupts Global Supply Chains

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6.13.2026

Quick Facts

Wholesale plastic resin prices surged 14% in May 2026 to a nearly four-year high due to Iran war supply disruptions
Middle East accounts for over 40% of global polyethylene exports, with supply chains severely impacted by Strait of Hormuz shipping disruptions
US plastic suppliers warn they can no longer absorb rising raw material costs, signaling price increases for consumer goods ahead

Plastic resin prices jumped 14% to an almost four-year high last month as the Iran war choked off supplies of key components, according to the latest Bureau of Labor Statistics Producer Price Index report for May 2026.

US plastic suppliers say they are running out of room to absorb high costs of raw materials. This raises the prospect of price increases for consumer goods ranging from groceries to cars later this year.

The war involving Iran is disrupting global plastics supply chains. Commercial shipping through the Strait of Hormuz has been severely disrupted since February 28, 2026. The strategic waterway remains almost entirely closed, with only a few ships from certain countries allowed to pass.

Oil prices have jumped more than 40% since the conflict escalated in late February. Brent crude is trading near $98 per barrel while WTI approaches $96.

“Global logistics have become uncertain, with up to 50% of polyethylene supply either offline, constrained or being impacted following the events in the Middle East,” said Dow CEO Jim Fitterling.

The Middle East accounted for over 40% of polyethylene exports in 2025, led by Saudi Arabia. The region ships to nearly every region outside North America. About $20 billion to $25 billion worth of petrochemical products pass through the Strait annually, according to Rabobank.

For producers like Shawn Gross, whose Corry, Pennsylvania-based company supplies molded parts used in automotive and heating systems, the squeeze is reaching a breaking point.

“Anyone who imports from the Middle East, which is pretty much everyone in the rest of the world to a certain extent, has lost a large supplier and is having to scramble to find replacement resin at extraordinarily higher prices,” said Joel Morales of Chemical Market Analytics by OPIS.

In the plastics manufacturing sector, materials such as plastic resins account for at least 50% of total costs. According to PLASTICS’ 2025 Size and Impact Report, materials represented 66.6% of shipments.

Price increases are likely to show up at grocery stores, given how ubiquitous plastics are in consumer products. “The meat displays, everything plastic wrapped, the styrofoam, encasements — all of that comes from petrochemical plants,” said University of Houston energy economist Ed Hirs.

A March 2026 survey from the German Association of Plastics Processors found that 99% of packaging manufacturers were facing price increases from suppliers. Only a few were able to pass on the additional costs to their own customers.

ICIS projects that it would take at least three months for plastic prices to begin normalizing once material flows readjust. If the conflict is resolved in May or June, plastic supply chain recovery likely would occur for the remainder of 2026.