China’s petrochemical glut turns into a crunch as the US-Iran war disrupts oil flows

Bloomberg reports that disrupted oil and naphtha flows have drained much of China’s petrochemical surplus. JPMorgan and ICIS say the squeeze is sharpest in the aromatics chain, which feeds products from tire rubber to plastic bottles. Goldman Sachs says around 95% of end-use chemical inventories built up in 2025 have been depleted, though overall stockpiles remain high by historical standards. Analysts say persistent overcapacity could limit the price rally.