Rising oil prices trigger a multiplier effect as Middle Eastern conflicts spread to textiles and beverages

People’s Finance News, March 30—Recently, Yemen’s Houthi forces have fired multiple ballistic missiles at Israel’s southern region. With the Houthis moving into the fray, the risk in the Red Sea’s key waterway, the Bab el-Mandeb Strait, has also clearly been heating up. Analysts warn that the impact of this conflict on the oil market is continually expanding; if it continues for several more weeks, even if the situation later eases, supply restoration may be difficult to catch up in time, and global crude oil inventories could be significantly drawn down. The impact on oil prices will not remain limited to the energy sector—it will transmit through base feedstocks such as naphtha into downstream petrochemical industry chains, ultimately reaching products such as plastics, permeating nearly all consumer goods. The founder of energy consultancy firm KSG pointed out that because much of the global flow of goods depends on plastics for packaging and transportation, the range of affected everyday products will be very broad; shortages of petrochemical products and rising prices will gradually filter through to multiple areas, including textiles, detergents, food, and beverages. Schwartz, co-founder of supply-chain analytics company Altana, said that the petrochemical market’s shock has a “multiplier effect,” meaning that a single cost increase will be magnified, layer by layer, across the industrial chain. Altana’s data shows that the Gulf region transported on the order of $733 billion in petrochemical feedstocks, intermediates, and finished products, which will further affect about $3.8 trillion in downstream goods—from toothpaste to towels—covering almost all categories of daily consumer consumption. (CCTV Finance)