Naphtha, palm, and the case for a third carbon source
Brent crude moved from roughly $60 a barrel to above $110 in the weeks after shipping through the Strait of Hormuz ground to a halt in early March 2026. Spot prices for petrochemical-derived non-ionic surfactants rose 20-30% in the same window, and several major surfactants producers announced intermediate price increases citing Middle East energy and logistics. This year has done more than raise costs. It has exposed a structural vulnerability in how the industry sources its carbon.
At Econic Technologies, we license a CO₂-based surfactant technology to producers looking to build optionality into their alkoxylate portfolios. That gives us a close view of how procurement and product teams across the industry are responding to the past year’s disruptions. The pattern is consistent: feedstock concentration risk, once managed at the procurement level, is now showing up in commercial strategy, sustainability roadmaps, and customer conversations.
The Hormuz shock and its cost footprint
The International Energy Agency has described the Hormuz disruption as the largest supply shock in the history of the global oil market. Roughly 12% of global ethylene capacity has been impacted. Some of that is because of the impact plants in the conflict zone. The rest is supply chain disruption. In Asia, for example, Japan imports about 70% of its naphtha from the Middle East. Asian crackers have throttled run rates by an estimated 7-8 million tonnes, and several have idled entirely.
Cost has moved through the value chain quickly. BASF lifted neopentyl glycol pricing. Eastman raised n-butyl alcohol. Nouryon increased ketone peroxides, citing the Middle East directly. Despite talks of ceasefires, chemical analysts expect elevated feedstock and intermediate pricing to persist through 2026 and into 2027 as inventories draw down and shipping flows gradually normalize.
Tariffs and EUDR: compounding pressures on sourcing
Trade policy has added another layer. US import tariffs reached their highest effective levels in nearly a century in 2025, and while large-volume petrochemicals were largely exempted, the secondary effects on freight and sourcing economics have impacted the industry.
Additionally, regulatory pressure on oleochemicals continues. The EU Deforestation Regulation (EUDR) was postponed twice, but now authorities say it will apply from December 30, 2026 for large operators and June 30, 2027 for SMEs. Companies are scrambling to provide geolocation data, supplier mapping, due diligence statements, and audit-ready records in order to manage palm-derived supply chains.
Every conventional feedstock now carries structural risk
Today, petroleum-based surfactants account for more than 70% of the global surfactants market. Palm- and oleo-based surfactants make up a majority of the remainder. Biosurfactants are a small but growing share.
But every conventional feedstock category for surfactants now carries at least one form of structural exposure, and most carry several. EO and PO carry exposure to geopolitics, tariff policies, and ethylene capacity rationalization across Europe and Asia. Oleochemical-derived fatty alcohols and fatty acids (whether palm-based or from other vegetable sources) carry the cost of EUDR compliance not to mention weather-related risks (think El Niño), shifting biodiesel mandates in Indonesia, and ongoing reputational pressure. Bio-based surfactants from food-grade sugars carry feedstock costs tied to commodity agriculture cycles and require novel fermentation infrastructure to scale.
Why geographic diversification alone won’t solve it
The first response to feedstock volatility has been geographic. PwC has identified six performance levers unlocked through supply chain localisation: resilience, efficiency, market responsiveness, cost reduction, sustainability benefit, and quality control. Reshoring activity in Europe and North America has already accelerated.
But geographic diversification cannot solve a vulnerability rooted in shared dependence on the same carbon. A US naphtha cracker and an Asian naphtha cracker run on different molecules from different basins, but both sit downstream of the same global crude market. A Malaysian palm refinery and an Indonesian palm refinery face different harvest conditions but the same EUDR compliance gate. Building duplicate capacity across geographies hedges against logistics shocks; it does not hedge against shared feedstock economics.
Real resilience requires diversification of the carbon source itself.
The case for a third carbon source
A more durable feedstock portfolio combines three independent pools: petrochemical, where it remains cost-competitive and integrated; oleochemical (including palm and other plant-derived sources), where formulation requirements and EUDR risk can be actively managed; and CO₂-based, where geographic distribution and structural independence from both oil and agriculture become commercial assets in their own right.
Using our technology together with a growing supply of bio-derived EO would allow customers to unlock surfactants that are not only 100% renewable, they could be much more resilient to geopolitical shocks.
Building the feedstock bench
The next 12 to 24 months will be a stress test for surfactant sourcing strategies. Producers building optionality across petrochemical, oleochemical, and CO₂-based feedstocks will be in a stronger position for the next disruption (and, in today’s world, there will be a next disruption). Beyond that, using CO₂ offers companies a way to reduce the carbon footprint of their products while potentially improving the performance of end products. It’s a triple win.
This article was written by Simon Bennett, Econic’s Commercial Director for Surfactants. To learn more or contact Simon, click here.
