Since the outbreak of war with Iran, oil prices have jumped, but trade through the Strait of Hormuz is about more than fuel. The basic building blocks of plastics are oil products, and shortages of plastics for Asian manufacturers are eventually going to lead to shortages of consumer goods around the world. CNN’s David Goldman says shortages are increasing in Asia, but they haven’t hit America quite yet. He writes:
“You hear a lot about crude oil and the impacts to diesel and gasoline – but feedstocks and petrochemicals are in short supply, too,” said Angie Gildea, KPMG global head of oil and gas.
Several major petrochemical producers, including South Korea’s Yeochun and PCS in Singapore, have declared “force majeure,” noted Stephen Brown, chief North American economist at Capital Economics. That means they’re unable to fulfil their commitments to customers.
Other companies say they’re running out of plastic packaging for their products. A condom maker said Tuesday that prices would surge because it can’t access manufacturing materials.
Action Line: Your Survival Guy has urged you to prepare ahead for disruptions. I hope you have. Hopefully, this won’t reach a critical state, but it’s always better to be prepared. Click here to subscribe to my free monthly Survive & Thrive letter.
