The Strait of Hormuz disruption is adding cost pressure to medical supply chains through an indirect but significant channel: the petrochemical derivatives used to make pharmaceutical packaging and drug ingredients, according to analysts tracking the disruption.
The United States and Israel launched coordinated strikes across Iran on Feb. 28, triggering a war that has now stretched into its 25th day with no clear path to de-escalation. Iran has signaled it is prepared to shut down the Strait of Hormuz indefinitely, while the UK Maritime Trade Operations agency has raised the threat level in the Gulf to critical. Oil markets are already reacting: Brent crude has surged past $100 a barrel and Goldman Sachs warns elevated prices could persist through 2027.
The Petrochemical Link
Strikes on Gulf refineries have set off a chain reaction in pharmaceutical supply chains, according to David Weeks, supply chain lead at Moody’s.
“These facilities produce key derivatives such as naphtha and methanol, which are important inputs for industries including pharmaceuticals,” Weeks told Benzinga.
Naphtha is commonly used in pharmaceutical packaging, while methanol is used in solvents for active pharmaceutical ingredient synthesis.
An estimated 18% of global methanol capacity has been affected by the Hormuz disruption, with US prices up 18% since the conflict began on Feb. 28, according to S&P Global Energy CERA data. The profit made from turning naphtha into industrial raw materials is at its highest point since early 2023, according to commodity trading house Alkagesta.
What Is …
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