Dow CEO warns petrochemical shortage from Iran war could fuel inflation for rest of the year

Petrochemical price spikes and shortages from the Iran war likely will cause inflationary effects at least through the end of the year on construction materials, consumer goods, the automative and aerospace industries, and much more, the CEO of Dow chemical said.

While much of the global supply shock focus is on oil, natural gas, fertilizer, and even helium for semiconductors, almost 20% of the global petrochemical capacity is blocked from the effective closure of the Strait of Hormuz chokepoint by Iran, said Dow chairman and CEO Jim Fitterling.

“The die is being cast for the rest of the year for what’s going to happen in the markets,” Fitterling said at the CERAWeek by S&P Global conference in Houston. “It’s like the unwind we saw on supply chains during COVID.

“You could be in the 250- to 275-day [range]. This is not going to be an instantaneous rewind.”

The supply shock will not only exacerbate the so-called K-shaped economic trends, he said, but also create greater haves and have nots between the Western and Eastern hemispheres.

Commodity petrochemical plants in the West—led by the U.S.—largely rely on natural gas-derived ethane as the chief feedstock, which........

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