Plastic is the hidden cost of the war in Iran
CNN • • business
Key Points:
- The ongoing war with Iran has caused oil prices to surge over 40% since late February, leading experts to warn of rising prices for plastic consumer goods such as disposable cutlery, bottled drinks, and garbage bags.
- Plastics, derived from fossil fuels like polyethylene and polypropylene, are heavily impacted by increased oil and natural gas costs, with the Middle East supplying about a quarter of global plastic raw materials and relying on the Strait of Hormuz for exports.
- Rising plastic resin prices have surged by double digits recently, and due to plastics' widespread use across industries, cost increases will gradually affect products from packaging to automotive manufacturing over months to years.
- Alternatives to plastics are limited and costly to implement in the short term, so companies may instead modify packaging designs to use less or cheaper plastic, but consumers should expect sustained higher prices if oil prices remain elevated.
- Even if the conflict ends soon, experts predict a prolonged period before plastic supply chains stabilize, potentially resulting in higher costs for plastic-based products for one to two years.
