Iran’s Strait Closure: Why Naphtha Could Make Everyday Goods More Expensive

What may initially appear to be a distant geopolitical conflict is, in reality, hitting wallets in Central Europe directly. Iran’s closure of a strait shipping route exposes a vulnerable point in the global economy: supplies of naphtha, the petrochemical industry’s most important feedstock. Within a few weeks, the consequences could be felt sharply in supermarkets, pharmacies and fashion chains.

Naphtha: the unseen material behind almost everything we touch

The blockade of the sea passage, through which roughly 4 million tonnes of naphtha would normally be shipped every month, has closed off a narrow bottleneck. Naphtha is produced during crude-oil refining and is considered a core building block of global petrochemicals.

The chemical industry uses this material to obtain basic molecules that go into an almost countless range of everyday goods, including:

• Plastic packaging for food, drinks and hygiene products
• Synthetic textile fibres for sportswear, fast fashion and technical jackets
• Varnishes, paints and coatings for cars and the home
• Cosmetics such as creams, make-up, shampoo and shower gel
• Tyres, seals and other rubber products
• Active pharmaceutical ingredients and excipients used in numerous medicines
• Solvents and cleaning agents for industry and households

More than nine out of ten objects around us depend, directly or indirectly, on petrochemical products – and therefore on naphtha.

When this single raw material becomes scarce or its price surges, it triggers a chain of price rises. The impact extends far beyond petrol, affecting the full range of goods based on oil-derived chemicals.

An already strained supply chain falls out of step

Even before the present conflict, petrochemical supply chains were under pressure. Across Europe, the sector was still dealing with the energy-price shocks of recent years. In particular, the exceptionally high gas and electricity costs of 2022 weighed heavily on the balance sheets of many chemical companies.

In Germany, the industrial heavyweight in this field, figures had already turned downwards in the fourth quarter of 2025. Output, prices and sales all declined. The VCI industry association, which represents more than 2,000 companies and over half a million jobs, had warned early on that the chemical sector was being structurally weakened.

The new tensions involving Iran have further intensified the situation. Since the confrontation began, oil prices have risen by around 40 per cent, while natural gas has become about 50 per cent more expensive. For European chemical producers, this means dramatically higher energy costs.

The natural-gas bill alone could increase by around €3 billion a year if prices remain at this level. Some major players, including Asian producers and the LyondellBasell group, have already declared “force majeure”. This allows them to suspend supply contracts without having to pay contractual penalties.

Delayed price wave: customers will feel the shock later

For now, most pharmacy and chemist shelves remain well stocked, while clothing rails in fashion shops are still full. However, this impression is misleading. Supply chains currently in operation are largely using inventories bought earlier at considerably lower prices.

Experts expect the real wave of price shocks to reach consumers in around two months.

The reason lies in how production chains are structured. Several weeks, or even months, can pass between the purchase of naphtha and a finished item reaching the shelf. The new costs only appear in retail prices once the more expensive batches of raw materials have fully entered production.

Where consumers are likely to feel the largest price jumps

Industry observers believe the following areas will be particularly affected:

• Medicines: Many tablets, ointments and capsules contain petrochemical components. Packaging such as blister packs and bottles is also becoming more expensive.
• Textiles: Synthetic fibres including polyester, nylon and elastane are oil-based. Sportswear and lower-priced everyday clothing could become noticeably more expensive.
• Cosmetics: Numerous formulations, from skin creams and deodorants to perfumes, depend on petrochemical feedstocks.
• Cars and bicycles: Tyres, interior plastics, paints and lubricants are all facing cost pressure.
• Household goods: Plastic containers, films, toys and cleaning products all contain chemicals derived from naphtha.

Retailers will try to phase in price rises. Even so, internal calculations are already referring to “noticeable to substantial” mark-ups in several product categories if the bottleneck continues.

Why Europe is especially vulnerable

Europe, and Germany in particular, relies heavily on imported fossil raw materials. At the same time, its energy prices are high by international standards. This makes the production of chemical intermediates on the continent significantly more costly than in regions with cheaper gas and oil, such as the Middle East and parts of Asia.

With every further price increase, companies face greater pressure to move production elsewhere or temporarily shut down plants. That puts jobs at risk not only in the chemical sector itself, but also in downstream industries, from mechanical engineering and car manufacturing to packaging.

If the industrial base becomes unstable, there could be lasting consequences: a loss of expertise, reduced investment in research and innovation, and greater dependence on imports for critical intermediate goods, including important pharmaceutical active ingredients.

What consumers can do now

Individual households cannot change the global situation, but they can reduce their own vulnerability to some extent. A number of practical approaches include:

• Check supplies: Top up stocks of regularly used medicines, such as painkillers or allergy tablets, sensibly and without stockpiling.
• Choose quality over disposable goods: Buy better-quality clothing or durable household items that can be repaired.
• Avoid packaging: Select products with less plastic packaging, such as refill packs or packaging-free options.
• Use alternatives: Where possible, opt for natural fibres such as cotton, wool or linen.

These measures reduce the immediate use of petrochemical products. They can also make household budgets somewhat more resilient to price spikes.

What terms such as “force majeure” and “naphtha” mean

Many of the technical terms used in this context may sound abstract, but they have direct implications for consumers.

Naphtha is a highly flammable liquid produced during the distillation of crude oil. It serves as the starting material for numerous downstream products in petrochemicals. In steam-cracking plants, naphtha is turned into smaller molecules such as ethylene, propylene and butadiene – the true “building blocks” of modern industrial products.

“Force majeure” is a legal term used in supply contracts. It applies when events occur that are beyond a company’s control, such as wars, natural disasters or government intervention. When a group declares force majeure, it can restrict or halt deliveries without paying contractual penalties. For buyers, this means having to find alternative sources at short notice, usually at substantially higher prices.

Longer-term risks to supply and prices

It remains unclear how long the current escalation will last. Should the conflict continue for months, the risk grows that prices will not only rise, but that some products may become temporarily scarce. Shortages of particular active ingredients could force pharmacies to switch to alternative medicines or dispense prescriptions in instalments.

Ranges in the textiles and cosmetics sectors could also be reduced if intermediate goods do not arrive in time. Manufacturers would then focus on products with higher margins, while lower-cost entry-level options are discontinued. This would be particularly painful for low-income households.

At the same time, the crisis is shifting the debate about the future of Europe’s chemical industry. Voices calling for a faster move towards bio-based raw materials, recycling streams and greater energy efficiency see their position reinforced. Yet the route there is long and expensive – and it will not solve the current problem in the short term.

For consumers, the coming months point to an uncomfortable truth: the geopolitical dispute over a strait shipping route acts as a magnifying glass for an industry that was already under strain. Anyone wanting to understand why shampoo, a T-shirt and tablets suddenly cost more at the till will find the answer not on the shelf, but in the tanker that can no longer deliver naphtha.