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How Middle East Geopolitical Risks Could Reshape Polyurethanes, Fertilizers, and Global Chemical Supply Chains Executive Summary The most important signal emerging from the first week of June 2026 is not simply higher crude oil prices. Rather, it is the growing realization that global chemical markets are entering a new phase in which access to stable and affordable natural gas may become the defining factor of competitiveness. Escalating geopolitical tensions in the Middle E

1. Middle East Conflict & Energy Nexus: The Fertilizer & Upstream Crises Acceleration Supply Impact: Following the escalation of Middle East conflicts in the first half of 2026—particularly regarding systemic maneuvers over key shipping lanes—systemic risks to global energy and upstream chemical feedstocks peaked in the first week of June. The Middle East accounts for nearly 10% of global urea capacity and remains a critical nexus for Liquefied Natural Gas (LNG) exports. Wit

Key Event On May 29, 2026, the German Chemical Industry Association (VCI) released its latest industry outlook, confirming that: The European chemical industry is not expected to recover in 2026. Key data points: Q1 2026 output declined ~6% year-on-year Chemical sales fell by more than 5% Industry sentiment remains at multi-year lows This marks a further deterioration in expectations for Europe’s chemical sector. 1. Structural Shift: From Cyclical Downturn to Structural Stag

1. Chemicals — European Chemical Industry Signals No Recovery in 2026 (VCI Outlook) Event:On May 29, Germany’s chemical industry association VCI stated that the European chemical sector is not expected to recover in 2026. Q1 2026 output declined ~6%, with weak demand across automotive, construction, and industrial manufacturing sectors. Analysis Supply Impact: Continued underutilization of European chemical capacity Ongoing production rationalization across base chemicals Per