War clouds are gathering over the Persian Gulf, and a “lifeblood” of global energy and trade is suddenly tightened.
As the United States and Israel launched military operations against Iran, Iran immediately announced the closure of the Strait of Hormuz.
This is the only waterway connecting the Persian Gulf and the Arabian Sea, and is responsible for about one-third of the world’s seaborne oil trade.
After the news of the closure of the strait came out, the international crude oil market responded, and the price of Brent crude oil surged sharply at the opening.
For the Chinese tire industry, which is deeply bound to the oil industry chain, this geopolitical storm is hitting simultaneously from the three dimensions of logistics, cost, and market.
Blocked export routes: chain shocks from the Persian Gulf to Europe
The closure of the Strait of Hormuz will bear the brunt of the Middle East, the core market for China’s tire exports.
Judging from the extent of the impact, the countries along the Persian Gulf have become the direct victims.
Countries such as Saudi Arabia, the United Arab Emirates, Iraq, Kuwait, Qatar, Bahrain and Iran are all located inside the strait, and all shipping in and out must pass through this chokepoint.
Data shows that China will export more than 70 million passenger tires, truck and bus tires, and off-highway tires to the Middle East in 2025, with Saudi Arabia, the United Arab Emirates, and Iraq consistently ranking among the top export destinations all year round.
Now, with the attack on Jebel Ali Port, the largest container port in the region, a large number of goods cannot be loaded and unloaded normally, and the logistics chain has come to a standstill.
What is even more worrying is that the Houthi armed forces announced that they would restart the blockade of the Red Sea shipping lanes in support of Iran.
This means that the already crisis-ridden Asia-Europe route has once again become worse.
The European market accounts for more than 40% of China’s tire exports, and obstruction of routes will directly lead to delivery delays, inventory backlogs, and may even trigger a passive loss of market share.
For goods transported to neighboring countries via the Mediterranean and Black Sea, shipping companies have chosen to bypass the Cape of Good Hope in Africa, which adds about 15 days to the voyage, and fuel consumption and time costs rise simultaneously.
Emergency response in the shipping market: Suspensions and surcharges
Faced with the risk of shipping disruption in the Strait of Hormuz, major liner companies around the world quickly launched emergency plans.
Mediterranean Shipping Company was the first to announce the suspension of global bookings to the Middle East. It is still unknown when it will be resumed.
Maersk is more cautious, not only suspending refrigerated freight and dangerous goods transportation to and from the United Arab Emirates, Oman, Iraq and other Gulf countries, but also pressing the pause button on new orders between the Indian subcontinent and the above-mentioned countries.
The freight market immediately experienced violent fluctuations.
CMA CGM has announced an “emergency conflict surcharge” on cargo shipped to and from Gulf and Red Sea countries, with the surcharge for a single 20-foot container ranging from $2,000 to $4,000.
Hapag-Lloyd followed suit by imposing a war risk surcharge of US$1,500 per standard container and making it clear that its ships would suspend passage through the Strait of Hormuz.
Shipping companies’ route arrangements have also been forced to make significant adjustments.
Ships that have entered the Persian Gulf will choose to stay or anchor in safe waters after completing the scheduled berthing; while ships that originally sailed to the Persian Gulf are notified to slow down or wait in a safe area to wait for further clarity on the situation.
Raw material costs are under pressure: the transmission chain from crude oil to rubber
Tire manufacturing is a typical resource-intensive industry, and crude oil price fluctuations will be transmitted step by step along the industrial chain.
The synthetic rubber sector bears the brunt.
Butadiene and styrene, the main raw materials for butadiene rubber and styrene-butadiene rubber, come from naphtha cracking units. Rising oil prices directly push up their production costs.
Market analysts pointed out that the sudden escalation of the situation in Iran has changed the expected trend of synthetic rubber. Butadiene has regained its upward momentum driven by crude oil. In the short term, the price of synthetic rubber may maintain a strong and volatile pattern.
Carbon black also faces cost pressure.
Its production raw materials coal tar and ethylene tar are closely connected with the petrochemical chain, and rising oil prices will gradually be transmitted to the ex-factory price of carbon black.
In addition, the cost of various additives, antioxidants, accelerators, cord fabrics and other auxiliary materials required for tire manufacturing will also rise.
A more insidious risk lies in the security of supply of specialty chemicals.
Iran is an important exporter of methanol in the world, and Israel is a core supplier of specialty chemicals such as bromine.
Bromine is a key raw material for the production of rubber additives and antioxidants. Once the supply is interrupted, it may trigger a “chain break” panic in the upstream industrial chain.
Data shows that more than half of China’s sulfur imports rely on the Middle East, and sulfur is the core raw material for the production of vulcanizing agents.
The blockade of the Strait of Hormuz directly threatens the stability of this supply channel.
Some research institutions have analyzed that this round of rising raw material prices may bring a 15% to 25% cost increase to the automobile manufacturing process, and the profit margins of tire companies are being further compressed.
Spreading concerns: Variables in overseas factories and industry structure
In addition to export logistics and raw material costs, this geopolitical storm is also quietly fermenting at other levels.
From within the industry, crises tend to accelerate the reshuffle.
Small and medium-sized tire companies that lack cost-passing capabilities and overseas market channels will bear the brunt of this round of impact.
And those leading companies with large-scale procurement advantages, global brand layout and advanced technology reserves are expected to expand their market share amidst the turmoil and further consolidate their industry position.
In the short term, China’s tire industry is experiencing the triple test of logistics congestion, cost inflation and market fluctuations.
But every crisis is also a stress test, forcing the industry to gradually transform from the traditional cost-driven model to technology and brand-driven; from simple product exports to systematic overseas expansion.
Only by building the ability to resist risks across cycles can Chinese tire companies stand firm in this sudden geopolitical storm and welcome a new round of growth after calm.
