Middle East Crude Supply Recovery Eases Petrochemical Prices Amid High Shipping Costs
Global crude oil and petrochemical feedstock prices have softened as supply flows from the Middle East improved, though elevated shipping costs continue to drive up delivered prices. Brent crude fell 4.9% week-over-week, while naphtha and ethylene also declined. Indian polymer prices showed mixed movement, with Polypropylene (PP) and High-Density Polyethylene (HDPE) gaining, while Polyethylene Terephthalate (PET) and Polyvinyl Chloride (PVC) dropped, reflecting uneven cost pass-through and cautious buying.
Brent crude prices eased as improved Middle East crude availability reduced the immediate supply-risk premium. India's September crude imports hit a 2026 high of around 5.26 million barrels per day (bpd) as Gulf supplies recovered, and refiners increased sourcing flexibility amid tighter Russian availability. Despite elevated logistics costs, Indian refiners continued shifting toward alternative grades and securing supply.
Asian feedstock markets softened alongside crude, although propylene remained resilient. Shipping inefficiencies and high tanker costs continue to influence delivered replacement costs. Indian refiners have increasingly arranged their own vessels and bought crude on an FOB basis, giving them greater control over freight and cargo movements.
In India, Reliance Industries' Mixed Xylene (Ex-Hazira) increased by INR 1/kg to INR 130/kg, while Purified Terephthalic Acid (PTA) remained at INR 106.50/kg and Monoethylene Glycol (MEG) declined by INR 5/kg to INR 78.70/kg. The lower MEG price provided some relief to PET-chain replacement costs. Indian polymer prices diverged, with PP and HDPE strengthening while PET and PVC moved lower, indicating that product-specific supply-demand balances are increasingly influencing polymer pricing alongside upstream costs.
Market implications include improved crude availability being offset by high transportation costs. Arabian Gulf-West Coast India VLCC freight reached $90.02/t on October 1, around 16% above September's average, keeping delivered Middle Eastern crude costs elevated. Indian refiners are also shifting their crude logistics, with companies like Indian Oil, Reliance, Bharat Petroleum, and HMEL increasingly buying Iraqi crude on an FOB basis and arranging their own tankers.
For downstream markets, festive demand remains supportive, but buying is selective. Automotive and FMCG activity is improving, while higher inventories ahead of the festive period could limit aggressive restocking. The near-term outlook is shifting from an outright supply shortage toward a logistics-led cost environment, with elevated tanker costs and security risks continuing to keep delivered replacement costs high.