Iran war pressures water sector supply chains
Key Highlights
- The conflict has significantly increased maritime shipping costs, leading to higher prices for chemicals and piping materials used in water infrastructure.
- Disruptions in the Strait of Hormuz are delaying shipments of petrochemicals and plastics, affecting global supply and pricing stability.
- Higher energy and chemical costs are expected to persist, impacting the procurement and construction of water treatment facilities worldwide.
The ongoing conflict involving Iran is beginning to ripple through global supply chains, raising concerns in the water sector about higher costs and potential shortages of treatment chemicals, piping materials and other infrastructure components.
Much of the disruption centers on the Strait of Hormuz, one of the world’s most critical shipping corridors for oil, petrochemicals and plastics. The conflict has significantly disrupted maritime traffic through the strait, slowing or halting tanker and cargo movement and sending global shipping and insurance costs higher.
For water utilities and treatment plants, the biggest immediate impact is transportation. On March 5, AAA reported the national average for a regular gallon of gasoline rose 27 cents week-over-week to $3.521. As of March 9, that average rose another 22 cents to $3.478.
Additionally, tanker and cargo vessel costs have surged as security risks grow and ships are rerouted or delayed. Freight rates for chemical cargoes have risen sharply, with some shipments facing extra costs of $200–$400 per container as vessels avoid high-risk routes or take longer detours.
These higher logistics costs can potentially feed into prices for water treatment chemicals such as chlorine, sodium hypochlorite, sulfur-based products and other petrochemical feedstocks. Many of these materials depend on energy and chemical supply chains tied to the Middle East, although the impact on U.S. utilities is less clear and harder to ascertain. As energy prices rise and exports are disrupted, manufacturers may face higher production and shipping costs.
The war is also affecting the global plastics and polymer markets that underpin water industry infrastructure and some treatment processes. The Middle East is a major exporter of petrochemicals and plastic resins used in pipe manufacturing, including polyethylene (PE) and polypropylene (PP). Roughly 84% of the region’s polyethylene export capacity moves through the Strait of Hormuz, making the route critical for global supply.
However, price surges may remain isolated to outside the U.S. due to domestic production.
"I strongly believe this spike in oil will be short lived once ships start moving again," said Plastic Pipe Institute President David M. Fink in a statement. " I don’t believe this will result in any significant cost increases for material pricing for North American plastic piping. Also, this will have no impact on supply as raw materials used to manufacture pipes for sale in North America are based in North America and not dependent on foreign imports, etc."
As the conflict escalates, producers and traders have halted or delayed shipments of these materials, while buyers anticipate tighter supplies and rising prices. In some markets, expectations for PE and PP prices have already increased by as much as $100 per metric ton due to uncertainty around logistics and feedstock availability. Polymers and resins used in treatment processes such as clarification and ion exchange are more specialized. WaterWorld is working with its sibling brand Plastics Machinery & Manufacturing and Materials Handling & Logistics to better understand the impact on those products and by extension the potential impacts on U.S. water systems supply chains.
Market data also shows polyethylene prices jumping rapidly in Asia after tensions intensified, reflecting concerns about reduced supply and higher crude oil costs tied to the conflict.
For the water industry, these trends could affect infrastructure and treatment materials and products, including:
- HDPE pipe: widely used for municipal systems and trenchless installations
- PP components and fittings: used in treatment equipment and piping systems
- Chemical feedstocks: used to produce treatment chemicals and industrial materials
- Polymers and resins: used during certain treatment processes in water and wastewater plants
Supply chain analysts note that disruptions from geopolitical conflicts can persist well beyond the initial event, because shipping backlogs, higher energy prices and production adjustments often take months to normalize.
While North American chemical producers may benefit somewhat from domestic production, utilities worldwide may still face volatility in materials pricing and delivery times for infrastructure projects and treatment operations.
For water utilities planning capital projects or chemical procurement, the conflict highlights the vulnerability of global supply chains that underpin critical infrastructure—from polymer pipe and treatment chemicals to the energy markets that influence both.
Read about the Iran war impacts in other markets
- War in Middle East could affect resin prices - Plastics Machinery & Manufacturing
- Oil tops $100 on intensifying Iran war - Oil & Gas Journal
- Shipping and Other Supply Chain Woes From War in Iran - Materials Handling & Logistics
- In a volatile resin market, be prepared but disciplined, expert says - Plastics Machinery & Manufacturing
- Iran war's impacts on oil and gas - Oil & Gas Journal
- How Iran conflict could impact carriers this week and beyond - FleetOwner
- Middle East Conflict Disrupts Global Air Cargo Networks as Capacity Drops and Rates Rise - Aviation Pros
- Potential Supply Chain Implications of the Iran Conflict - Supply Chain Connect
About the Author
Alex Cossin
Associate Editor
Alex Cossin is the associate editor for Waterworld Magazine, Wastewater Digest and Stormwater Solutions, which compose the Endeavor Business Media Water Group. Cossin graduated from Kent State University in 2018 with a Bachelor of Science in Journalism. Cossin can be reached at [email protected].