The conflict has significantly driven up maritime shipping costs, leading to higher prices for chemicals and pipeline materials used in water infrastructure.
Disruptions to traffic through the Strait of Hormuz have caused delays in the transportation of petrochemical products and plastics, affecting global supply and price stability.
Energy and chemical costs are expected to keep rising, which will impact the procurement and construction of water treatment facilities worldwide.
Ongoing conflicts in Iran have begun to ripple through global supply chains, sparking concerns in the water sector over rising costs and potential shortages of treatment chemicals, pipeline materials, and other infrastructure components.
The disruptions caused by the conflict are concentrated mainly in the Strait of Hormuz, one of the world’s most critical shipping lanes for oil, petrochemicals, and plastics. The conflict has severely disrupted maritime traffic through the strait, slowing or halting oil tanker and cargo movements, and driving up global shipping and insurance costs.
For water utilities and treatment plants, the most immediate impact is felt in transportation. On March 5, the American Automobile Association (AAA) reported that the national average price for regular gasoline rose by 27 cents month-on-month to $3.521 per gallon. As of March 9, the average price had increased by another 22 cents to $3.478 per gallon.
In addition, as security risks increase and vessels are diverted or delayed, costs for oil tankers and cargo ships have risen sharply. Freight rates for chemical cargoes have surged particularly steeply, with some cargoes costing as much as $200 to $400 per container as ships avoid high-risk routes or take detours.
Rising logistics costs may push up prices for water treatment chemicals such as chlorine, sodium hypochlorite, sulfur-based products, and other petrochemical feedstocks. Most of these materials rely on energy and chemical supply chains linked to the Middle East, but the impact on U.S. utilities remains unclear and difficult to quantify. As energy prices rise and export disruptions occur, manufacturers may face higher production and transportation costs.
The conflict has also affected the global plastics and polymers market that underpins water industry infrastructure and some water treatment processes. The Middle East is a major exporter of petrochemicals and plastic resins used in pipe manufacturing, including polyethylene (PE) and polypropylene (PP). Approximately 84% of the region’s polyethylene export capacity passes through the Strait of Hormuz, making the channel critical to global supply.
However, due to constraints on domestic production, any sharp price increases may be limited to regions outside the United States.
David M. Fink, President of the Plastics Pipe Association.
“I am confident that the surge in oil prices will be short‑lived once shipping resumes,” said David M. Fink, President of the Plastics Pipe Association, in a statement. “I do not expect this to result in a significant increase in plastic pipe material prices in North America. Furthermore, there will be no impact on supply, as the raw materials used for pipe sold in North America are produced domestically and do not rely on foreign imports.”
As the conflict escalated, producers and traders halted or delayed shipments of these materials, while buyers anticipated tighter supply and higher prices. In some markets, price expectations for polyethylene (PE) and polypropylene (PP) have risen by up to $100 per tonne due to uncertainty over logistics and feedstock supply. Polymers and resins used in treatment processes such as clarification and ion exchange are more specialized. WaterWorld is collaborating with its sister brands Plastics Machinery & Manufacturing and Materials Handling & Logistics to better understand the impact on these products and the potential knock‑on effects on the U.S. water system supply chain.
Market data show that Asian polyethylene prices rose sharply as tensions intensified, reflecting concerns over reduced supply and higher crude oil costs linked to the conflict.
For the water sector, these trends could affect infrastructure, treatment materials, and products including:
High‑density polyethylene (HDPE) pipes: widely used in 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 in certain treatment processes at water and wastewater treatment plants
Supply chain analysts note that disruptions from geopolitical conflicts can persist long after the initial events end, as shipping backlogs, elevated energy prices, and production adjustments typically take months to normalize.
While North American chemical producers may benefit from domestic production, utilities worldwide could still face volatility in material prices and lead times for infrastructure projects and treatment operations.
