Six months into the Middle East conflict, the power dynamics of the global oil market have undergone a structural shift. The OPEC+ alliance, once the dominant market force, now struggles to influence the pricing system. As of July, OPEC+’s share of global oil production had fallen from over 48% prior to the conflict to around 40%, with its seven core members (including Saudi Arabia and Russia) accounting for just one-quarter of global output. This shift marks a transition in market focus from OPEC+ production decisions to the actual physical export capacity of Middle Eastern oil.

Stalemate at the Strait of Hormuz Erodes OPEC+ Influence

The effective blockade of the Strait of Hormuz is the direct cause of the decline in OPEC+ market power. Traffic through this critical artery—vital for exports from major producers like Saudi Arabia, Iraq, and Kuwait—has plummeted. Consequently, the six production-increase plans announced by OPEC+ since March have largely remained on paper, failing to translate into actual export volumes. Unlike supply disruptions affecting individual nations during the Gulf War or the Iraq War, this blockade constrains multiple producers simultaneously; OPEC+ has lost its ability to influence the market through production adjustments, and the marginal utility of its policy tools has sharply declined.

This situation stands in stark contrast to 2019. Back then, traders closely monitored OPEC+ production decisions, with the central question being how much oil the alliance chose to pump. Today, the core issue is how much oil can actually be produced and exported amidst the ongoing Middle East war. This shift reflects a transfer of power within the oil market from producer alliances to physical supply chain constraints, with geopolitical risk—rather than production policy—becoming the primary driver of price premiums.

The decline in OPEC+ market share also reflects a structural trend of rising output from non-OPEC+ producers. Even if the Strait of Hormuz were to reopen, OPEC+’s coordination capabilities have been severely compromised following the UAE’s withdrawal and internal disputes over quotas, and internal rifts continue to widen. **Shift in Demand Center: Asia Emerges as a New Balancing Variable**

As the influence of OPEC+ wanes, the center of gravity for global oil demand is shifting. Since the outbreak of conflict, the pace of crude oil imports by major Asian consumers has changed, with purchase volumes contracting compared to the same period last year. Sparta Commodities, a Swiss provider of commodity market intelligence, notes that demand-side shifts have become a critical factor influencing oil prices for 2026, with Asian import patterns directly affecting the global supply-demand balance. This shift contrasts sharply with last year's buying spree—when growth in purchases from certain demand centers accounted for nearly half of global demand growth—whereas the current contraction is capping the potential for oil price increases.

This shift in roles signifies a transition in market adjustment mechanisms from a supply-centric model to one driven by the interplay of both supply and demand. Analysts describe this as a dual dynamic where "OPEC+ dominates supply while the weight of demand-side adjustments rises." This not only influences how traders position themselves against supply shocks but also reshapes market reactions to geopolitical events.

Ongoing changes on the demand side will also indirectly affect the feedstock supply landscape for Asian light hydrocarbon crackers. As demand-side adjustments gain weight, refinery operating rates and refined product trade policies in major consuming nations become pivotal factors influencing global petrochemical feedstock prices. Consequently, the feedstock cost risks faced by chemical companies are evolving from simple supply-side risks into complex risks driven by fluctuations in both supply and demand.

Oil and Chemical Markets Must Adapt to Change

The reshaping of the global oil power landscape will have profound implications across multiple levels. With OPEC+’s market share falling below 40%, the marginal impact of its statements and policy decisions on oil prices has diminished significantly. This implies heightened potential for price volatility in the global oil market—volatility that could spill over into energy stocks, crude oil futures, and broader financial markets—thereby significantly increasing the complexity of risk management.

For the chemical industry, this structural shift impacts feedstock markets through two primary channels. First, the loss of OPEC+’s buffering capacity implies greater price volatility; chemical companies will face a landscape of fluctuating costs for feedstocks such as naphtha and condensate, necessitating enhanced hedging strategies and supply chain flexibility to navigate price uncertainty. Secondly, the rising weight of demand-side adjustments implies that refinery operating rates and refined product trade policies in major consuming nations will become critical variables influencing global petrochemical feedstock prices; consequently, chemical enterprises must incorporate market demand dynamics into their pricing monitoring frameworks.

Furthermore, the global oil market may shift from a landscape dominated by a single "OPEC+" pole to a "dual-center" structure driven by both supply and demand. U.S. shale oil provides supply flexibility, Middle Eastern Gulf producers control low-cost resources, and major Asian consuming nations have emerged as a significant force in demand-side adjustment. This multi-centric structure will continue to shape trade flows and pricing benchmarks for global chemical feedstocks. Chemical enterprises need to establish scenario analysis frameworks to adjust procurement strategies in response to various market configurations and to re-evaluate the weighting of geopolitical risk premiums in long-term contracts.

As the global oil market transitions from a unipolar to a multi-centric structure, the waning influence of OPEC+ and the rise of Asian demand centers will impact the chemical industry. This signifies a shift in the anchoring points for feedstock pricing benchmarks—moving away from policy declarations in Riyadh toward the realities of transit through the Strait of Hormuz and the refinery operating rhythms of major consuming nations. In the coming years, uncertainty will become the norm, and adaptability will emerge as a core dimension of competitiveness. (Source: China Chemical Industry News)

SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.