Impact of the Iran–Israel–US War on the Polyester Supply Chain (PET Chips, POY) and the Global Textile Market

The polyester supply chain is one of the most strategic and highly integrated segments of the global textile industry. It is heavily dependent on energy markets, petrochemical feedstocks, and international transportation networks. Any geopolitical tension in energy-producing regions—particularly the Middle East—can rapidly transmit into the synthetic fiber market and significantly disrupt the entire textile value chain.
Political and military tensions between Iran, Israel, and the United States have been among the key drivers of shocks in the global energy market in recent years. This situation has directly affected the production of PET chips and polyester yarns (POY, FDY, DTY) through higher oil prices, disruption of trade routes, and instability in petrochemical supply.
According to reports by Reuters and Allianz Research, the textile industry—especially the polyester value chain—is classified among the sectors with a high risk of geopolitical disruption.

Structure of the Polyester Supply Chain and Critical Points
The polyester production chain is a fully integrated and energy-intensive system:

Crude Oil → Paraxylene (PX) → PTA / MEG → PET Chips → POY / FDY / DTY → Fabric → Garments

Critical points in this chain:
• Petrochemical feedstocks (PX, PTA, MEG) 
• Energy (natural gas and industrial electricity) 
• Maritime transportation through strategic routes (Strait of Hormuz, Red Sea) 
• Dependence on a limited number of Asian suppliers 
According to Fastmarkets, a significant share of global energy and petrochemical flows passes through geopolitically sensitive routes, which become highly volatile during crises.

Impact of War on Petrochemical Feedstocks and PET Chips
1. Energy price shock
War increases the risk of oil supply disruption, leading to higher global energy prices. This directly impacts petrochemical production costs.
Consequences:
• Higher crude oil prices 
• Increased production costs for PX, PTA, and MEG 
• Higher cost of PET chip production 

2. Direct impact on PET Chips
Higher feedstock costs lead to:
• Increased cost per ton of PET chips 
• Reduced supply in Asian markets (China, India, Korea) 
• Intensified competition for raw material procurement 
As a result, the PET market enters a phase of structural shortage combined with sustained price increases.

Impact on POY, FDY, and DTY Production
POY (Partially Oriented Yarn), as a key intermediate product in the polyester chain, is highly sensitive to PET price fluctuations.
Main effects:
1. Rising production costs
•  Direct increase in PET chip prices → higher POY prices 
•  Higher energy costs in melting and spinning processes 
•  Increased overall operational expenses 
2. Reduced production efficiency
•  Lower machine utilization rates 
•  More frequent production stoppages due to raw material shortages 
•  Instability in production planning 
3. Market price volatility
•  Daily fluctuations in POY prices 
•  Reduced predictability in long-term contracts 
• Widening price gaps between regional producers 

Disruption in Logistics and International Transportation
According to Reuters, geopolitical tensions significantly increase transport risk and logistics costs.
Key effects:
•  Higher container shipping costs 
• Increased war-risk insurance premiums 
• Rerouting of vessels (longer transit times) 
• Longer lead times across the entire supply chain 
Industrial consequence:
Higher logistics costs are directly transferred into final yarn and fabric prices.

Impact on Textile Mills and Yarn Production
In polyester spinning units:
• Unstable access to PET chips 
•  Increased production stoppages 
• Lower operational efficiency 
In POY/DTY production:
•  Severe raw material price volatility 
•  Higher yarn production costs 
•  Reduced export competitiveness 

Impact on Global Market and Consumer Demand
According to Allianz and Reuters reports, geopolitical conflicts also reshape global consumer behavior:
• Reduced household purchasing power 
•  Lower order volumes from major apparel brands 
• Increased price competition in global markets 
• Shift in consumption toward lower-cost products 

Global Supply Chain Restructuring (Structural Shift)
Geopolitical tensions are driving a structural transformation in the polyester supply chain:
Key trends:
• Relocation of production from high-risk regions to India, Vietnam, and Turkey 
• Expansion of the "China 1" strategy 
• ncreased production of recycled PET (rPET) 
• Higher strategic inventory holdings by manufacturers 

Industrial Risk Assessment
Based on industry data synthesis, the main risks include:
1. Volatility in oil and petrochemical feedstock prices 
2. Disruption in PET chip supply 
3. Rising transportation costs 
4. Declining production efficiency 
5. Instability in the global polyester yarn market 

Final Conclusion
The Iran–Israel–US conflict can be considered a structural geopolitical shock that directly and indirectly affects the entire global polyester supply chain.
This shock has pushed the polyester industry into a new phase characterized by:
• Sustained increase in production costs 
• Reduced raw material supply security 
• Higher price volatility in global markets 
•  A shift toward regional and multi-sourced supply chains 
In this environment, future competitiveness will depend on companies"ability to:
•  Manage geopolitical risk effectively 
•  Diversify supply sources 
• Improve energy and production efficiency 


 

♦ References

•Reuters – Global petrochemical and textile supply chain disruption reports 
•Allianz Research – Textile Sector Risk & Supply Chain Reports 
•arXiv (2025) – Geopolitical disruption in global supply chains 
•Fastmarkets – Fibers and Nonwovens Market Intelligence 
•Market Prospects – Textile supply chain geopolitical impact analysis 
•Textile Compass – Polyester market and price trend reports 
•CCF Group – PET, PTA and polyester pricing reports 

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