Since May this year, the security situation in the Middle East has once again become tense. The Barakah nuclear power plant in the Zafra area of Abu Dhabi was attacked by drones, and the shipping crisis in the Strait of Hormuz has continued to escalate. Multiple factors have driven the international crude oil price to rise significantly. The Brent crude oil futures have risen to $111.48 per barrel, and the price of West Texas Intermediate (WTI) has also climbed simultaneously. This energy fluctuation triggered by geopolitical conflicts is spreading along the industrial chain to every link of the global textile market.
It is reported that in this drone attack, three drones entered from the western border of the United Arab Emirates. Two of them were intercepted by the anti-aircraft system, and one hit the power generation units outside the nuclear power plant and caused a fire. The accident did not result in any casualties, and the nuclear reactor was operating normally. However, market concerns over the escalation of the US-Iran conflict and the disruption of supply through the Strait of Hormuz have significantly intensified.
The Strait of Hormuz handles approximately one-fifth of the global oil transportation volume. Currently, the shipping in this strait has not yet returned to normal, the insurance costs for oil tankers have risen significantly, many energy enterprises have suspended the passage of ships, and the export volumes of oil-producing countries such as Iraq have declined significantly. Coupled with the approaching peak of summer oil consumption in the Northern Hemisphere and the fact that global oil inventories are at an eight-year low, the rise in oil prices has become an inevitable trend. For the textile industry that is highly dependent on oil, this means a significant increase in costs.
The impact of rising oil prices on the textile market is first manifested in the synthetic fiber sector. The raw materials for synthetic fibers such as polyester, nylon, and spandex all come from petroleum. Over 60% of the textile fibers in the world are synthetic fibers. The core raw materials for functional clothing as well as auxiliary materials such as clothing dyes and coatings also rely on petrochemical products. Driven by the oil price increase, the price of synthetic fibers has risen by more than 15%. The prices of raw materials such as polyester POY have soared significantly compared to the beginning of the year. Take a 500-yuan mass-market down jacket as an example, the cost of the polyester raw material alone has increased by nearly 40 yuan. In addition, the rising oil prices have also pushed up logistics freight, factory energy costs, and fertilizer prices. Small and medium-sized textile factories are facing the dual pressure of costs and orders, and some enterprises have been forced to reduce production capacity.
The market chain reaction soon became apparent - the sharp increase in the price of synthetic fibers prompted textile enterprises and the retail sector to seek alternative solutions, and the demand for natural fibers such as cotton and wool rose temporarily. Many enterprises began to adjust their raw material ratios and increase the proportion of natural fibers used, and the retail sector also intensified the stockpiling of natural fiber clothing.
It should be noted that the current transmission of cost pressures is lagging. Spring and summer clothing orders are mostly for products with fixed prices in advance, and the terminal prices have not yet risen significantly. Industry predictions suggest that as cost pressures continue to accumulate, the prices of 2026 autumn and winter clothing, especially functional clothing, are expected to increase by 5% to 15%, with the final burden falling on consumers.
The geopolitical conflicts are unlikely to be resolved in the short term, and the situation in the Strait of Hormuz remains highly uncertain. The analysis by Zhongjin Wealth Futures suggests that if the actual blockade of this strait persists, the price of crude oil may experience another sharp fluctuation, and the cost pressure on the textile industry may further increase. However, China's textile industry has a relatively complete layout of the production chain, and enterprises are gradually reducing their reliance on petroleum raw materials by optimizing supply chains, exploring alternatives with bio-based fibers, and promoting the recycling of used clothing, thereby enhancing their ability to withstand market fluctuations.
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