US petchem margins jump as Hormuz disruptions may stretch into 2027. Al Greenwood 28-Apr-2026 HOUSTON (ICIS)-Petrochemical margins through the ethylene chain have spiked following the closure of the strait of Hormuz, and those disruptions may persist at least through 2026 and possibly into 2027, the co-CEO US midstream company Enterprise Products said on Tuesday. One week before the start of the war in Iran, ethane to ethylene cracking margins were about 7 cents/lb ($154/tonne), said Jim Teague, co-CEO of Enterprise Products. Teague made his comments during an earnings conference call. Now those margins are 23 cents/lb, he said. During the same period, the ethylene to polyethylene (PE) spread rose to more than 45 cents/lb from 20 cents/lb, Teague said. MARKETS UNDERESTIMATE UNPRECEDENTED DISRUPTIONS Teague said the scale of the supply disruptions caused by the war in Iran are the worst he has experienced in his career, which started in 1972. "Today, we believe the financial markets are underestimating the potential global supply implication from a prolonged closure of the strait of Hormuz," Teague said. Estimates of the scale of the disruption are 12 million to 15 million bbl/day of crude oil, refined products, LPG and petrochemicals, Teague said. Stretched through one month, up to 450 million bbl/day of hydrocarbons are off the market. The earliest that the strait can reopen for operations is July, Teague said. By then, the disruptions would have lasted for four months - or up to 1.8 million bbl of lost hydrocarbons. That figure does not take into account further supply disruptions caused by damage to onshore production facilities and refineries, Teague said. According to a report from Bloomberg, Saudi Aramco has paused shipments of LPG for May after damage to a facility. The Saudi Press Agency reported attacks on other facilities. "The impact to hydrocarbon markets around the world has been significant, and we see this strong demand continuing through the remainder of '26 and maybe into '27," Teague said. ENTERPRISE TO COMMISSION TWO NGL EXPORT PROJECTS IN 2026 Enterprise expects to have additional capacity to meet that demand later this year. In May, Enterprise should complete the commissioning of phase two of its Neches River Terminal project, said Tyler Cott, senior vice president, hydrocarbon marketing. The project will add a flexible refrigeration train that can handle 180,000 bbl/day of ethane or 360,000 bbl/day of propane. In the fourth quarter of 2026, the company should complete the expansion of the Enterprise Hydrocarbons Terminal (EHT) on the Houston Ship Channel, which will increase LPG export capacity by 300,000 bbl/day. Enterprise also announced two new natural gas processing plants that it will build in the Permian basin. These plants remove impurities from raw natural gas so it can be burned as fuel. They also extract ethane, propane and other natural gas liquids (NGLs), which are later shipped to fractionators to be separated into purity products that can be used as feedstock by petrochemical plants. Each processing plant will have a processing capacity of 300 million bbl/day, and they should start operations in the second half of 2027. ASIAN DISRUPTIONS In Asia, supplies of naphtha have been disrupted because of limited shipments through the strait of Hormuz and lower production from the region's refineries, many of which are prioritizing fuel production over petrochemicals. The Middle East is also a large supplier of liquefied petroleum gas (LPG), which many Chinese propane dehydrogenation (PDH) units use as a feedstock to make propylene. Chinese PDH units are running at less than 50% capacity, Teague said. Asian markets are destocking petrochemical inventories by consuming derivative inventories, he said. European economic sentiment crumbles in april. INSIGHT: oil shortage chips away at SE Asia economic resilience. SABIC swings to net profit in Q1 on decrease in operating costs. Thailand lowers 2026 GDP forecast amid mideast conflict, raises inflation forecast. Global news + ICIS chemical business (ICB). See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.

Enterprise Products Partners is attracting investor attention amid Middle East conflict-driven energy market volatility. The Iran war has disrupted the Strait of Hormuz, through which 20% of global oil and liquefied natural gas previously flowed daily, causing energy prices to spike. The master limited partnership operates critical midstream infrastructure including pipelines and export terminals, generating stable cash flows through long-term contracts. It currently offers a 5.6% distribution yield, covered 1.7 times by cash flow last year. The company maintains an A-rated credit rating and low leverage. Enterprise Products completed $6 billion in growth projects last year and has another $4.8 billion under construction. The MLP has increased its distribution for 27 consecutive years despite energy sector volatility.