Apr 9, 2026

War-driven plastic shortages ripple through manufacturing sector, raising costs

Plastic prices are rising as war in the Middle East constrains supply chains and global petrochemical markets.

Click to Listen to the interview: War in the Middle East by Elizabeth Trovall.

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Giant machines are spread across a gray manufacturing floor at Texas Injection Molding in southeast Houston, where plastic is heated and molded into random widgets such as medical-grade containers for syringes and bait buckets for exterminators.

The factory goes through about 8 million pounds of plastic each year, according to company founder Jeff Applegate.

In recent weeks, the cost of those plastics has jumped as conflict in the Middle East and transit uncertainty through the Strait of Hormuz disrupt global oil, gas and petrochemical supply chains that underpin everything from packaging to medical supplies.

“If the price was, say, 75 cents, we’re seeing 10 to 20 cents per pound increases on some of those. So it’s a pretty significant percentage,” Applegate said.

Around the world, commodity-grade plastic prices are up because of the war, according to Al Greenwood, who covers plastics and petrochemicals for ICIS.

“Polyethylene and polypropylene, those are used in packaging. U.S. contract prices for March rose by nearly 20%, and if you look at plastic used in beverage bottles, nearly 15%,” Greenwood said.

Disruptions to roughly 20% of the global supply of oil and liquefied natural gas are already pushing prices higher. The Middle East is also a big producer of plastics and chemicals — not just oil and gas.

“Those plants are on the wrong side of the strait,” Greenwood said. “So when all of a sudden, 25% of the plastic exports aren’t available to global markets, you have the same amount of demand competing for a smaller piece of the pie.”

Plastic and petrochemical price hikes are particularly affecting manufacturing sectors including food and beverage, packaging, and pharmaceuticals, said Tony Bennett, president of the Texas Association of Manufacturers.

“If it goes for an entire quarter, then you’re going to see significant slowing of the economy and consumers being very skittish and businesses backing off how many widgets they put out on the truck for delivery,” Bennett said.

He said he’s already seeing some demand destruction.

“Some of these costs could be passed on. Some of these costs may have to be absorbed by the middlemen to keep the deal going and not lose customers in the long term,” he said. “So, it’s tricky.”

Jeff Applegate is navigating those challenges at Texas Injection Molding.

Plastics make up roughly half of his input costs. He works with plastics including polyethylene, polypropylene, ABS, nylon, urethane and polycarbonate — all fossil fuel-derived products.

“The largest input cost to the manufacturing process is the material. And so when your material goes up 10% or 15%, it puts a real squeeze on you, really quick,” he said.

Applegate said the industry is bracing for supply cost increases and figuring out how to keep their business profitable.

“If there’s an increase in raw material costs and we’ve got to pass that on, they also have to prepare and have to have time to be able to work with their customers,” he said. “All the way through the supply chain, everybody’s trying to manage it.”

Applegate said manufacturers are worried about what happens if this war drags on. Despite the recent ceasefire agreement and oil prices falling to $100 a barrel for West Texas Intermediate, it could take months before traffic through the Strait of Hormuz returns to normal.

“The longer this goes on, we’ll have to pass some of those costs on to our customers,” he said.