The conflict between the U.S., Israel, and Iran has persisted for over a month, severely disrupting shipping in the Strait of Hormuz. This global energy artery is not merely an ordinary waterway—it serves as the heart of global oil trade. By leveraging it as a weapon, Iran has effectively placed a dagger against the jugular of the world economy. Whoever controls the strait holds the valve to the global economy, influencing not only shipping volumes but also global price expectations.

Amid the Middle East geopolitical tensions, market fears of a blockade in the Strait of Hormuz—which handles about 20% of global seaborne crude oil—have intensified. Several crude oil traders have suspended shipments, and supply disruption concerns have triggered a sharp surge in crude oil prices.

The spike in crude oil has directly driven up the production costs of pure benzene. Domestic spot prices of pure benzene and Sinopec’s listed prices have been raised accordingly, leading to a corresponding increase in the price of hydrogenated benzene, a related product.

Disruptions in Iran's crude oil, LNG, and chemical exports have triggered a wave of production cuts at overseas refineries. Reductions due to raw material shortages or declared force majeure have provided substantial support for pure benzene and downstream styrene, particularly for pure benzene. Overseas production cuts have reduced exports of pure benzene to China. Meanwhile, some large Chinese refineries, concerned about crude oil supply and facing profit losses, have reduced operating rates by 10–30%, further tightening domestic pure benzene supply.

Following the escalation of Middle East tensions, China's styrene exports have increased significantly. It is reported that exports reached 200,000 tons in April, compared to 307,600 tons for the entire year of 2025. A global styrene supply gap has emerged, and China, with its large industrial scale and more stable production compared to overseas markets, has capitalized on this export opportunity.

Data from the table above indicate that the domestic pure benzene market is currently in a state of undersupply, with a negative supply-demand gap whose absolute value continues to widen. Due to the Middle East geopolitical conflict, shipping disruptions in the Strait of Hormuz have led to reduced operations at overseas refineries, benefiting the supply side for pure benzene and styrene. Domestic refinery production cuts have further reduced supply. Reshaped import-export trade flows have intensified regional tightness: imports of pure benzene from Japan, South Korea, and Southeast Asia have declined noticeably, though some supply from India has shifted to China as a partial offset. Meanwhile, styrene has seen a surge in export opportunities due to supply disruptions in the Middle East. On the demand side, downstream pure benzene sectors maintain acceptable profits, supporting rigid demand, though some downstream users hold high raw material inventories. For styrene downstream sectors, high prices are difficult to pass through, putting pressure on profits and accumulating risks of negative feedback.

Looking ahead, if navigation through the strait remains obstructed, factors such as reduced domestic pure benzene supply, lower import volumes, and steady downstream procurement may further drive up prices of pure benzene and hydrogenated benzene. If navigation resumes in the short term, risk premiums may quickly recede. However, the lag in supply recovery, coupled with restocking demand from downstream sectors, is expected to provide structural support for pure benzene and styrene, suggesting limited downside room for pure benzene and hydrogenated benzene. Going forward, it is recommended to closely monitor the progress of strait navigation, operational status of pure benzene upstream and downstream facilities, and downstream acceptance of high prices.