China's imports of U.S. ethane surged to an all-time high in April, as the war in Iran choked off supply of rival feedstocks from the Middle East and reshaped global petrochemical trade flows.
Data from traders and shipping analytics firms show the U.S. is now China’s sole supplier of ethane, a key ingredient for making plastics. Shipments have continued despite a broader trade war, with imports rising 50 percent year-on-year in the first quarter of 2026, according to China customs data.
The U.S. exported 5.95 million tons of ethane worth $2.96 billion to China in 2025. The disruption in the Strait of Hormuz, where tanker traffic has fallen from 1,500 vessels a month to just 180 in April, has made U.S. cargoes more critical. The conflict has sent prices for plastics and other refined products soaring, with several Asian chemical producers declaring force majeure, according to The Economist.
The shift underscores China's dependence on the U.S. for the specific feedstock, even as it has halted imports of American oil and LNG. While the U.S. has never been a major crude supplier to China, the trade in ethane and propane, worth over $9.5 billion in 2025, continues to be a significant economic link.
The closure of the Strait of Hormuz has led to a significant drop in oil production from OPEC members. The group's output fell by 830,000 barrels per day in April, with Kuwait seeing the largest drop, a Reuters survey found. The United Arab Emirates was the only Gulf member to increase production, utilizing its pipeline that bypasses the strait.
This disruption has had a ripple effect across global markets. The price of plastics has soared along with crude oil, and other ingredients like naphtha, also sourced from the Middle East, have become more expensive. In the U.S., retail gasoline prices have jumped from just over $3 per gallon in February to nearly $4.60, with forecasts suggesting prices could exceed $5 a gallon if the strait remains closed.
For the shipping industry, the conflict has created a shortage of bunker fuel, the sludgy residue of crude oil that powers most large vessels. With Singapore, the world's largest refueling hub, seeing dwindling reserves and spiking prices, shipping companies are facing increased costs that will likely be passed on to consumers. The daily cost of the war for the global shipping industry is estimated at nearly $400 million, according to the European Federation for Transport and Environment.
This article is for informational purposes only and does not constitute investment advice.
