The March 2026 US-Israel-Iran War has severely disrupted the global energy supply chain, triggering soaring oil prices and inflation that spread to all sectors. The POF shrink film and Crosslink shrink film industry, closely tied to the industrial chain, faces short-term pressure and long-term differentiation, with its trend closely linked to the war’s duration and energy supply recovery.

The war impacts the global economy in three key ways. Iran’s blockade of the Strait of Hormuz cut 20% of global oil supply, pushing prices above $100 a barrel (peak $115) and raising energy costs. Rising energy prices fueled inflation, deepening global stagflation and hurting energy-importing economies. Additionally, Middle East chemical raw material shortages and blocked shipping routes disrupted supply chains and raised logistics costs.

As a chemical downstream sector, the POF shrink film industry is hit hard. Key raw materials like polyethylene and polypropylene, dependent on petrochemicals, rose 40% in a week, squeezing profits and threatening small manufacturers. Short-term demand weakened as food, e-commerce and export sectors faced slowdowns and delivery delays.

The industry’s future depends on the war’s length. A one-month truce would stabilize oil prices ($70-$80/barrel) and the industry. A 1-3 month war would keep raw materials volatile, accelerating industry reshuffling. A war over 3 months could push oil above $120, spark a recession and slump in demand, making green transformation crucial.