Hormuz Disruption : Updates on the impact for Southeast Asia’s Chemical Chain
For years, the Strait of Hormuz was treated as one of those geopolitical pressure points everyone worried about, but few believed would truly choke Asian industry in real time. That assumption is now being tested. What began as an energy and shipping shock has very quickly turned into a petrochemical feedstock problem, and Southeast Asia is already feeling it. Reuters reports that the strait has effectively shut amid the conflict, while industry reporting shows that more than 60% of Asia’s seaborne naphtha imports come from the Middle East. For refiners and crackers across this part of the world, that is not a distant macro headline. That is a direct operating risk.
The reason this matters is simple. Petrochemicals do not stop at crude oil. Once crude and naphtha flows tighten, the stress moves into crackers, then into olefins, then into downstream polymers and intermediates. In other words, the impact does not stay inside refineries. It starts moving into the materials that sit behind packaging, plastics, coatings, adhesives, consumer goods and industrial manufacturing. That is exactly what we are now seeing across Southeast Asia.
Singapore is the clearest stress point
Singapore is currently the clearest example of how quickly an integrated chemicals hub can feel the pressure. PCS issued a formal force majeure notice to customers on 5 March, explicitly citing material disruption to maritime transportation and broader supply chains linked to the Middle East conflict. A day later, Aster Chemicals and Energy also declared force majeure, citing disruption in raw material supply. Reuters notes that Aster operates a 237,000-bpd refinery and a 1.1 million-metric-ton-per-year cracker in Singapore’s Bukom and Jurong Island system.
What makes Singapore especially important is the knock-on effect. This is not one isolated company having a bad week. TPC, a downstream polyolefins producer on Jurong Island, declared force majeure after shutting multiple plants because it could not get olefins from upstream supplier PCS. Sumitomo Chemical Asia also issued a force majeure notice for methyl methacrylate production after PCS declared force majeure on shipments. This is the textbook domino effect of an integrated petrochemical cluster: once the upstream molecule is disrupted, downstream units start failing one after another.
Singapore’s refining side is also under pressure. Reuters reported that Singapore Refining Co cut runs at its 290,000-bpd Jurong site to around 60%, while ExxonMobil’s Jurong refinery cut crude runs to around 50% or lower from around 80% or more. Reuters also cited Kpler data showing that Exxon’s Singapore refinery sourced around 65% of its crude through the Strait of Hormuz this year. That is a reminder that even sophisticated, globally connected hubs remain exposed when feedstock routes are this concentrated.
Indonesia has already moved into force majeure territory
Indonesia’s Chandra Asri was one of the earliest Southeast Asian names to declare force majeure. ICIS reported that the company told customers its feedstock shipments from the Middle East had been disrupted by the security situation around Hormuz. Sources also said the cracker continued running, but at a reduced rate because of feedstock uncertainty. That distinction matters. Sometimes plants do not shut immediately; they first slide into reduced operating rates, supply allocation and contract pressure before harder operational decisions follow.
This is particularly important for Indonesia because Chandra Asri is not a fringe producer. It sits deep inside the country’s polymer value chain. When a producer of that scale starts signalling uncertainty, the market does not just worry about one company’s volumes. It starts repricing regional availability, lead times and customer confidence.
Thailand has joined the list
Thailand is no longer a watch-list market in this story. Reuters reported that Rayong Olefins, a unit of Siam Cement Group, declared force majeure on 6 March due to the Middle East conflict. That matters because Thailand is a major industrial and export manufacturing base, so petrochemical disruption there can spread well beyond the chemicals sector itself. It affects packaging, intermediates and manufacturing cost structures across multiple downstream industries.
Malaysia is showing operational stress even without a headline force majeure
Malaysia’s Pengerang Refining Company, or Prefchem, is a strong example of why it would be a mistake to track only formal force majeure declarations. Reuters reported that Prefchem shut its 300,000-bpd crude unit and was expected to shut its 1.2 million-ton-per-year steam cracker. Kpler data cited by Reuters showed that more than 70% of Prefchem’s seaborne crude imports last year came through the Strait of Hormuz. So even where force majeure language is not front and centre, the operating reality still points to the same regional stress: less feedstock, lower runs, and rising vulnerability.
Vietnam has not declared force majeure, but it is clearly in response mode
Vietnam is a useful counter-example because it shows what governments and refiners do before a full-blown plant disruption arrives. Reuters reported that Binh Son Refining and Petrochemical asked the government to prioritise domestically produced crude for the Dung Quat refinery while limiting crude exports, and Vietnam later said it would remove fuel import tariffs until the end of April. The same Reuters report said domestic fuel prices had already risen by 21% to 32% since the conflict began. That tells you Vietnam is not yet the epicentre of force majeure announcements, but it is already in active defensive mode.
What this means for the region
At a regional level, this is now bigger than a handful of company notices. Reuters reported that Asian refining margins jumped to their highest level since 2022, with Singapore’s complex margin reaching nearly $30 a barrel. At the same time, marine fuel prices in Singapore have more than doubled since late February, Reuters said, with low-sulphur bunker fuel moving above $1,000 per metric ton and suppliers turning increasingly to spot offers. Those are not background market indicators. They are operating cost signals, and they point to a region where logistics, energy, and petrochemical pricing are all tightening at once.
My read is that this becomes a three-layer problem for Southeast Asia. First, it is a feedstock availability problem for refiners, crackers and downstream chemical manufacturers. Second, it is a pricing and working-capital problem as crude, naphtha, freight and bunker costs move sharply. Third, it becomes a customer allocation and service problem, where producers have to decide who gets product, who gets delayed, and which contracts become hardest to honour. The force majeure notices we have already seen are really just the first visible sign of that chain reaction.
Bottom line
The original LinkedIn claim was directionally right in spotting that a serious disruption is unfolding. But for a Southeast Asia-focused article, the more accurate story is this: the region is not simply watching a Middle East oil crisis from the sidelines. Singapore, Indonesia and Thailand already have confirmed force majeure cases. Malaysia has meaningful operational curtailments. Vietnam has moved into emergency supply protection. This is no longer just a geopolitical headline. It is now a live Southeast Asian chemicals and supply-chain event.
Reference
Reuters – How the Strait of Hormuz closure affects global oil supply
https://www.reuters.com/graphics/IRAN-CRISIS/OIL-LNG/mopaokxlypa/ICIS – Indonesia’s Chandra Asri declares force majeure on feedstock disruption
https://www.icis.com/explore/resources/news/2026/03/03/11184743/update-indonesia-s-chandra-asri-declares-force-majeure-on-feedstock-disruption/PCS Pte Ltd – Formal notice of force majeure
https://www.pcs.com.sg/news-post/pcs-pte-ltd-issues-formal-notice-of-force-majeureArgus Media – Singapore’s TPC declares FM on upstream supply woes
https://www.argusmedia.com/de/news-and-insights/latest-market-news/2798284-singapore-s-tpc-declares-fm-on-upstream-supply-woesReuters – Southeast Asian refineries curb output as war tightened crude supply
https://www.reuters.com/world/asia-pacific/corrected-southeast-asian-refineries-curb-output-war-tightened-crude-supply-2026-03-10/Reuters – Siam Cement’s Rayong Olefins declares force majeure
https://www.reuters.com/business/energy/siam-cements-rayong-olefins-declares-force-majeure-letter-says-2026-03-06/Reuters – Asia refineries cut runs on Middle East oil disruption
https://www.reuters.com/business/energy/asia-refineries-cut-runs-middle-east-oil-disruption-2026-03-05/Reuters – Asia refining margins rocket to highest in nearly 4 years
https://www.reuters.com/business/energy/asia-refining-margins-rocket-highest-nearly-4-years-hormuz-supply-disruption-2026-03-05/
