Hormuz Crisis Week 2: Brent Hits $120, Trump Signals End to Iran War, but PE Supply Remains Paralyzed
Pedro Zaccaria
Head of Technology
The Most Volatile Oil Session Since 2022 — and PE Supply Still Frozen
The second week of the Strait of Hormuz crisis produced the most extreme oil price swing since 2022. On March 9, Brent crude surged to $119.50/bbl — the highest since June 2022 — before crashing below $90 after President Trump told CBS News the war against Iran is “very complete.” Bloomberg called it potentially the largest intraday-to-close drop on record.
But for polyethylene (PE) and polypropylene (PP) buyers, the oil price headline obscures what actually matters: physical supply chains remain paralyzed. Every major container line has suspended Gulf transits. QatarEnergy’s force majeure on polymer production enters its second week with no restart timeline. On March 9 itself, Iranian strikes set Bahrain’s only refinery ablaze, triggering yet another force majeure. Kuwait, Iraq, and the UAE are all cutting production as storage fills up.
The IRGC’s conditional offer to reopen the Strait — for countries that expel US and Israeli ambassadors — drew zero diplomatic responses. Shipping through Hormuz has collapsed 90% from pre-crisis levels. Rapidan Energy Group called this the “largest oil disruption in history” — more than double the 1956 Suez Crisis.
This is a Week 2 update to our initial Hormuz crisis analysis, covering the March 9 oil price roller coaster, Trump’s market-moving interventions, cascading Gulf production shutdowns, and PE/PP price transmission now hitting every continent.
Brent Crude’s $30 Intraday Swing: The Full Price Timeline
Oil’s trajectory since February 28 has been staggering. Brent rose from a pre-war baseline of $64–67/bbl to $119.50 intraday on March 9 — a 75%+ surge in 10 days. The prior week’s 35% gain was the largest weekly increase in oil futures trading history, according to CNBC.
| Date | Event | Brent | WTI |
|---|---|---|---|
| Feb 27 | Pre-strike baseline | $67/bbl | $63/bbl |
| Mar 1 | Iran declares Hormuz closed | ~$80/bbl (+10%) | $72.74 (+8.4%) |
| Mar 3 | Trump insurance/escort pledge | $80 (down from $84) | $73 (down from $77) |
| Mar 5 | Iran attacks tanker; “if they rise” | $85.41 (+4.9%) | $81.01 (+8.5%) |
| Mar 7 | Record weekly gains | Briefly above $100 | $90.90 |
| Mar 8 | 3-year highs | $119.50 intraday | $119.48 intraday |
| Mar 9 | Trump “very complete” + sanctions waiver | Settled $98.96; fell to ~$90 | Settled $94.77; fell to ~$86 |
| Mar 10 | De-escalation hopes | ~$88.90 (−10%) | — |
Both WTI and Brent were technically the most overbought on record (WTI) and since 1990 (Brent), according to Reuters. UBS analyst Giovanni Staunovo warned that alternatives like strategic reserve releases are “a drop in the ocean” relative to the disruption’s magnitude.
Even the price retreat carries a structural floor. Kpler estimates that even if the Strait reopens immediately, it would take six to seven weeks for Gulf exports to return to full capacity — suggesting oil prices will remain well above pre-crisis levels regardless of diplomatic progress.
Trump’s Three Market-Moving Moments
March 3: The $20 Billion Insurance Pledge
Trump announced on Truth Social that he had ordered the U.S. Development Finance Corporation (DFC) to provide $20 billion in political risk insurance for maritime trade through the Gulf, with Navy escorts if necessary:
“No matter what, the United States will ensure the FREE FLOW of ENERGY to the WORLD.”
— President Trump, Politico, March 3, 2026
Oil pulled back several dollars from intraday highs. But the relief was short-lived. RBC Capital Markets questioned how much planning had been done. Insurance Journal reported that shipowners would “be wary of tying their fortunes to a volatile US administration.” ING’s Warren Patterson warned: “Naval escorts will be sitting ducks to Iranian attacks.” The world’s largest insurance mutuals had already withdrawn war risk coverage entirely.
March 5: “If They Rise, They Rise”
In a Reuters exclusive interview, Trump dismissed oil price concerns and ruled out tapping the Strategic Petroleum Reserve:
“I don’t have any concern about it. They’ll drop very rapidly when this is over, and if they rise, they rise, but this is far more important than having gasoline prices go up a little bit.”
— President Trump, Reuters, March 5, 2026
He outlined a 4–5 week military campaign timeline. Combined with Iran attacking a tanker the same day, oil surged 20% for the week — WTI posted its biggest single-day gain since May 2020. Reuters noted the tone shift from a president who had touted low gas prices in his State of the Union just days before the strikes.
March 9: “Very Complete” and the Sanctions Waiver
The tone shifted dramatically on March 9. Trump told CBS the war is “very complete” and the US is “very far ahead” of his timeline. Separately, he announced a 30-day waiver on Russian oil sanctions to allow ~20 million barrels of stranded tankers to deliver to Indian refineries. He also signaled consideration of Strategic Petroleum Reserve releases — reversing his position from four days earlier.
The market impact was immediate: Brent fell from $119.50 to $98.96 at settlement, then slid to ~$90 post-session. Energy Secretary Chris Wright told CBS: “We have a temporary period of elevated energy prices, but it will not be long.” But internally, Reuters reported that Chief of Staff Susie Wiles warned failure to act on price rises would be “catastrophic for Republicans in the midterms.”
IRGC’s Conditional Reopening: A Diplomatic Non-Starter
The Strait of Hormuz remains effectively closed to commercial traffic, despite a series of evolving Iranian statements:
| Date | IRGC Statement | Source |
|---|---|---|
| Mar 2 | “The strait is closed. If anyone tries to pass, the heroes of the Revolutionary Guard will set those ships ablaze.” | Al Jazeera |
| Mar 4 | “The Strait is under the complete control of the Islamic Republic’s Navy.” | Al Arabiya / AFP |
| Mar 5 | Strait will open for Arab and European countries that expel US and Israeli ambassadors | ISNA (Iran state news) |
| Mar 6 | Iran “has not closed” the Strait — but US/Israel-linked vessels will not pass | Iran International |
No Arab or European government has responded to the conditional offer. The demand — expelling the ambassadors of the two nations currently striking Iran — is diplomatically untenable for any country with Western economic ties.
On the water, the reality is grim. On March 3, only 4 ships transited the Strait — a 90% drop from the 7-day average of ~138 vessels, according to Windward maritime intelligence via Daily Sabah. At least 8 commercial vessels were struck between February 28 and March 7, with 2 crew fatalities. On March 7, the IRGC hit another oil tanker. 147 container ships remain trapped inside the Persian Gulf, while approximately 150 tankers sit anchored outside the Strait.
Production Shutdowns Cascade Across the Gulf
What began as a shipping disruption has become a production crisis. With exports blocked and storage filling up, Gulf producers are being forced to cut output:
| Entity | Status | Impact |
|---|---|---|
| QatarEnergy | Force majeure (Mar 4); restart “weeks” away | Ras Laffan LNG + polymer production halted |
| Bahrain Bapco | Force majeure (Mar 9); Sitra refinery struck | 405,000 bpd refinery ablaze |
| Kuwait Petroleum | Force majeure; cuts tripling | ~1.4M bpd combined refinery capacity |
| Saudi Aramco | Ras Tanura refinery shut; redirecting to Yanbu | Yanbu at 1.9M bpd (vs 5–6M normal via Hormuz) |
| UAE (ADNOC) | Reducing production; using Fujairah pipeline | 1.5M bpd Fujairah bypass partial offset |
| Iraq | Rumaila complex halted Mar 4; Basra zero crude Mar 3 | 3.5M bpd Basra capacity idle |
| Chandra Asri (Indonesia) | Force majeure (Mar 3); feedstock cut off | Partial production halt — unresolved |
JPMorgan warns that if the disruption persists for 21 days, major regional producers will be forced to shut down facilities entirely as onshore storage reaches capacity. Gulf producers currently have storage and tanker capacity covering approximately 25 days.
QatarEnergy’s situation illustrates the slow recovery ahead. On March 6, Bloomberg reported a single tanker departed Ras Laffan with LNG — likely loaded from storage, not new production. By March 8, QatarEnergy was marketing its tanker fleet for charter, signaling that the company expects prolonged idleness. Qatar’s energy minister warned that continued disruption could push Brent toward $150/barrel.
From Oil to Resin: Polyethylene and Polypropylene Prices Surge Across Three Continents
The feedstock cost shock is now transmitting directly to polymer markets worldwide. ICIS reports that 84% of Middle East polyethylene capacity depends on the Strait of Hormuz for export access, along with 14 million tonnes of methanol and 6.5 million tonnes of ethylene glycol.
India: Historic Single-Day Price Hikes
On March 6, Indian polymer markets experienced one of the largest single-day price revisions in recent memory, with HDPE, LLDPE, LDPE, and PP homopolymer all affected:
| Grade | Price Increase (₹/MT) |
|---|---|
| PP (all sectors) | +15,000 |
| LLDPE / HDPE | +15,000 |
| LDPE | +17,000 |
| LD AL / W&C | +18,000 |
| LD HD / EC | +20,000 |
Europe: Triple-Digit Increases and a Six-Week Shortage Warning
European PE and PP producers shifted from initial March contract offers of EUR 30–50/tonne to triple-digit increases exceeding EUR 100/tonne, according to ICIS. The European ethylene contract price (MCP) for March settled at EUR 1,145/mt, up EUR 50 from February (S&P Global). Plasteurope warned that a PE shortage is “expected within six weeks” as US volumes are “unlikely to compensate” for the loss of Middle Eastern supply. For more on how European converters are adapting, see our analysis of thermoplastic resin demand trends in Europe.
Feedstock: Naphtha at 4-Year Highs
Asian naphtha refining margins surged to a 4-year high of ~$173/ton over Brent, per Reuters. Naphtha prices rose 18% in a single week. As we detailed in our initial analysis, ADI Analytics estimates 1.2 million barrels/day of naphtha transit Hormuz, with 72% destined for Northeast Asia. With Brent having moved $30+/bbl above pre-crisis levels, naphtha-based PE producers in China, South Korea, and Japan face cost increases far exceeding the 300–500 RMB/ton typically associated with a $10/bbl oil move.
North America: Positioned to Fill the Gap — Partially
The US currently exports 80–85 million lbs/day of PE, with spot-heavy sales that can be redirected quickly. Goldman Sachs noted that US chemical makers relying on natural gas feedstock are insulated as oil prices rise, widening the cost advantage for US-origin PE resin. But ICIS PE analyst Harrison Jacoby cautioned: “The US can certainly help fill gaps from potential Middle East supply disruptions. However, the US would fall short of completely backfilling 100% of Middle Eastern exports.”
Shipping Paralysis: Every Major Carrier Grounded
Every major container line has suspended Gulf operations:
- Maersk: All Hormuz transits suspended. FM1 and ME11 services halted. Rerouting via Cape of Good Hope. Emergency freight surcharges for all Gulf ports.
- Hapag-Lloyd: All transits halted. Bookings suspended to/from UAE, Iraq, Kuwait, Qatar, Bahrain, and Saudi Arabia.
- MSC: Declared “End of Voyage” for all Gulf-bound cargo — containers discharged at next safe port regardless of destination.
- CMA CGM: All ships in Gulf ordered to shelter. Suez passage suspended. Emergency surcharges: $2,000/TEU, $3,000/FEU, $4,000 for reefers.
- ONE, COSCO: Halted new bookings; assessing in-transit cargo case by case.
Cape of Good Hope transits jumped 35% on March 3 — but the reroute adds 10–14 days to delivery times and sharply increases costs.
Insurance and Freight: Record-Breaking Costs
| Metric | Pre-Crisis | Current | Source |
|---|---|---|---|
| War risk premium (% of hull) | 0.2% | 3.0% | Reuters |
| Supertanker daily rate | ~$218,000 | $423,736 (record) | CNBC |
| VLCC voyage premium | — | $2–3 million | Caixin |
| Cost for $250M tanker (war risk alone) | $500,000 | $7.5 million | Reuters |
The world’s largest marine insurance mutuals have withdrawn war risk coverage entirely. London marine insurers have widened the designated high-risk zone across the entire Mideast Gulf.
The Dollar, Inflation, and the Fed
The Hormuz crisis is rippling through macro markets. The US Dollar Index (DXY) rose to 99.257, gaining 1.5% for the week — its best performance since November 2024. The euro touched a 3-month low of $1.1505 before recovering after Trump’s de-escalation signals. Rabobank’s Bas van Geffen noted: “There appears to be little to no escape. Dollar liquidity appears to be king.”
US gasoline prices jumped 48 cents in a single week to $3.478/gallon (AAA) — the fastest weekly rise since March 2022. Fed rate cut expectations for 2026 fell from 59 basis points to 40 basis points, with the next easing pushed to September or October.
European natural gas (TTF) rallied 67% in the prior week — the largest weekly gain since February 2022 — reaching EUR 56–61/MWh as EU gas storage sits below 30% of capacity (vs. the 41% five-year average). Goldman Sachs warned that a one-month Hormuz halt could push TTF and JKM benchmarks 130% higher. US Treasuries sold off with benchmark yields rising to 4.138%, while Bitcoin fell to ~$69,000–72,000 near multi-year lows.
What Polyethylene and Polypropylene Buyers Should Do Now
The convergence of extreme oil volatility, unresolved force majeures, and complete carrier suspension means the supply disruption is getting worse, not better, despite de-escalation rhetoric:
- Do not equate oil price dips with supply recovery. Brent falling from $120 to $90 reflects speculative positioning and political rhetoric, not physical supply returning. Kpler estimates 6–7 weeks to restore full Hormuz flows even if the Strait reopens tomorrow.
- Source PE and PP from non-Gulf origins immediately. US Gulf Coast PE suppliers have a structural cost advantage with gas-based feedstock. Chinese bonded inventory remains the most price-competitive option for SE Asian and Brazilian buyers. See our initial crisis analysis for specific arbitrage windows and pricing data.
- Price freight for a 3–6 month disruption. War risk premiums of 3% on hull value, supertanker rates at $423,736/day, and carrier surcharges of $2,000–4,000/TEU are not temporary. Even after a ceasefire, insurance markets take months to normalize.
- Watch European supply closely. Plasteurope warns of PE shortages within six weeks. If European producers can’t secure naphtha feedstock — 60%+ sourced from the Middle East — production cuts follow.
- Build inventory buffers now. Multiple force majeures, carrier suspensions, and production shutdowns create compounding delays. Lead times that were 4–6 weeks are now 8–14 weeks via Cape of Good Hope rerouting.
How Syntex America Helps You Navigate the Crisis
As the Hormuz crisis deepens, origin diversification is no longer a strategy — it’s a survival requirement. Syntex America supplies PE — including HDPE, LLDPE, and LDPE — and PP (homopolymer and copolymer) from producers across the Americas, Asia, and non-Gulf origins, with freight forwarding that adapts to rerouted shipping in real time.
Our 30–90 day payment terms provide cash flow protection during periods when spot resin prices move daily. And our customs clearance team manages the documentation complexity of redirected cargoes and shifted origins.
Contact our trading team today to secure PE and PP supply before arbitrage windows close. Explore our full trading services, freight forwarding, and financing options.
Frequently Asked Questions
Brent crude surged to $119.50/bbl intraday — the highest since June 2022 — before settling at $98.96 after Trump told CBS the Iran war is 'very complete.' Post-settlement, Brent fell further to ~$90 on reports of Russian oil sanctions waivers and a Trump-Putin phone call. Bloomberg called it potentially the largest intraday-to-close drop on record. Rapidan Energy Group described the broader crisis as 'the largest oil disruption in history' — more than double the 1956 Suez Crisis.
No. On March 5, the IRGC announced the Strait would open for Arab and European countries that expel US and Israeli ambassadors. On March 6, Iran softened its position, claiming it had 'not closed' the Strait but would restrict US/Israel-linked vessels. No country responded to either offer. As of March 10, only 4 ships transited on March 3 (a 90% drop from the 138-vessel daily average), 147 container ships remain trapped in the Persian Gulf, and at least 8 commercial vessels have been struck with 2 crew fatalities.
Price transmission has hit every major market. India saw PP, HDPE, and LLDPE jump INR 15,000/MT and LDPE surge INR 17,000-20,000/MT on March 6. European PE producers raised March contract offers to EUR 100+/tonne, up from initial EUR 30-50/tonne (ICIS). Naphtha prices rose 18% in one week with Asian refining margins at a 4-year high of ~$173/ton over Brent (Reuters). ICIS reports 84% of Middle East PE capacity depends on the Strait of Hormuz for export access. Plasteurope warned of a European PE shortage within six weeks.
As of March 9: QatarEnergy (LNG and polymer production, March 4, restart 'weeks' away), Bahrain's Bapco Energies (405,000 bpd Sitra refinery hit by Iranian strikes, March 9), Kuwait Petroleum Corporation (oil and refinery products, ~1.4M bpd capacity), and Indonesia's Chandra Asri (feedstock disrupted, March 3, unresolved). Saudi Aramco shut Ras Tanura refinery after a drone strike and redirected exports to Yanbu. UAE's ADNOC and Iraq are also cutting production as storage reaches capacity.
Trump made three market-moving interventions. On March 3, his $20 billion DFC reinsurance and Navy escort pledge briefly calmed markets (Brent fell from $84 to $80). On March 5, his 'if they rise, they rise' comments inflamed markets — oil surged 20% for the week, with WTI posting its biggest single-day gain since May 2020. On March 9, his 'very complete' signal and 30-day Russian oil sanctions waiver caused the biggest relief: Brent fell from $119.50 to under $90 post-settlement.
Kpler estimates 6-7 weeks for Gulf exports to return to full capacity even if the Strait reopens immediately. QatarEnergy's polymer restart alone will take weeks. Insurance markets will need months to normalize war risk premiums (currently 3% of hull value, up from 0.2%). Cape of Good Hope rerouting adds 10-14 days to delivery times. JPMorgan warns that if the disruption persists beyond 21 days, major Gulf producers will be forced to shut down facilities as storage hits capacity — creating an even longer recovery timeline.
LDPE faces the tightest supply picture because Iran is a major global LDPE exporter — supplying 14.1% of China's LDPE imports before the crisis. Indian markets saw LDPE prices jump INR 17,000-20,000/MT on March 6, the largest single-day increase among all PE grades. HDPE and LLDPE both rose INR 15,000/MT in India, while European producers raised March PE contract offers above EUR 100/tonne. PP homopolymer saw equivalent increases across all sectors. With 84% of Middle East PE capacity dependent on the Strait of Hormuz for export access (ICIS), all grades face supply constraints, but LDPE's concentration of production in the Gulf makes it the most vulnerable.
The polymer market outlook for mid-2026 depends heavily on the Hormuz resolution timeline. Even in an optimistic scenario where the Strait reopens within weeks, Kpler estimates 6-7 weeks for Gulf exports to normalize. European PE shortages are expected within six weeks (Plasteurope). Naphtha-based PE producers in Asia face sustained cost pressure with naphtha margins at a 4-year high of ~$173/ton over Brent. US-origin PE resin has a widening cost advantage due to gas-based feedstock insulation from oil spikes. Buyers should plan for 8-14 week lead times via Cape of Good Hope rerouting and elevated freight and insurance costs through at least mid-2026.
