Zhenghao New Materials

On May 28 local time, the International Energy Agency (IEA) released the World Energy Investment Report 2026. It notes that the far-reaching impacts of ongoing conflicts in the Middle East are prompting governments and enterprises worldwide to revisit their energy investment strategies. Disruptions to shipping through the Strait of Hormuz have significantly heightened concerns over energy security and the reliability of global commodity trade.

The report states that the current energy crisis, caused by the effective closure of the Strait of Hormuz, has altered market risk perceptions and driven countries to further diversify energy sources and transport routes. Coming just a few years after the energy crisis triggered by the Russia-Ukraine conflict in 2022, this turmoil is expected to exert long-term effects on global energy investment priorities, especially in Asia and the Middle East — regions most severely affected by shipping disruptions in the strait.

Fatih Birol, IEA Executive Director, commented: "We are facing the largest energy security crisis in history. This will reshape global energy investment strategies, much like the profound changes the energy sector underwent following the oil crises in the 1970s."

He added that energy producers and consumers are accelerating efforts to diversify energy supplies and transportation corridors, including building new oil pipelines and supply infrastructure, while ramping up the use of domestically available energy resources such as renewables, nuclear power, and in some cases, coal, oil and natural gas. Countries are also strengthening power systems, expanding electrification and improving energy efficiency.

Against this backdrop, the chemical additives industry is facing major shocks and structural adjustments. Chemical additives including plastic antioxidants, light stabilizers, textile finishing agents and leather coating agents rely heavily on oil, natural gas and imported feedstocks like naphtha, methanol and sulfur from the Middle East. Shipping disruptions in the Strait of Hormuz have led to tightening raw material supplies and sharp price hikes. Surging energy costs have squeezed corporate profit margins, while prolonged delivery times and rising performance risks have forced some downstream manufacturers to cut or halt production. In the short term, the industry is focused on cost pass-through and supply chain risk mitigation. In the long run, the trend will accelerate domestic substitution of raw materials, independent technological innovation and the adoption of eco-friendly additives, shifting the global production landscape toward regions with diversified energy supplies such as Asia.