The ongoing conflict between the US, Israel, and Iran is a triple blow to the global textile industry.

As the conflict continues to escalate, the shadow over the Middle East is not only looming over geopolitics but also subtly impacting every link in the global textile supply chain.

On February 28th, local time, the US and Israel launched military strikes against Iran, triggering severe turmoil in the international energy market and significantly increasing the risk of navigation through the Strait of Hormuz. This conflict, thousands of miles away, is delivering a comprehensive shock to the already pressured textile industry through three transmission channels: cost, logistics, and trade. Domestic small and medium-sized textile enterprises are particularly caught in the dilemma of "losing money on orders and having no orders if they don't take them."

As an industry highly dependent on energy and cross-border trade, the textile industry's pain points are first precisely hit by soaring oil prices. As a major global oil producer, the instability in Iran directly disrupts global crude oil supply expectations, causing international oil prices to jump, with many indicators breaking recent records. The core raw materials for the textile industry—polyester, nylon, and other synthetic fibers—are all crude oil derivatives. Rising oil prices directly drive up the prices of upstream raw materials such as PX and PTA, forming a clear cost transmission chain: Crude Oil ↑ → PX ↑ → PTA ↑ → Polyester ↑ → Synthetic Fiber Fabrics ↑. Industry data shows that in just one month, the price of polyester staple fiber rose by 800 yuan/ton, directly squeezing the profit margins of small and medium-sized textile enterprises by 5%-15%, forcing many companies into a passive situation of "rising raw material prices but difficulty in raising finished product prices."

Logistical disruptions became the second straw for textile companies. The Strait of Hormuz handles 20% of global oil transportation and is a crucial shipping route for the import and export of textile raw materials and finished products. Tensions have forced oil tankers to detour around the Cape of Good Hope, adding 15-20 days to the voyage, causing ocean freight rates to surge by 150%-250%, and war risk premiums to soar by 300%-500%.

For textile companies reliant on Middle Eastern entrepot trade, the impact is even more direct. Dubai's Jebel Ali Port, the largest free port in the Middle East, sees 60% of textiles transshipped to Saudi Arabia and Iran. Disrupted shipping routes have led to significantly increased shipping delays and delivery default risks. Some orders from Europe and the US are facing order cancellations and delayed payments due to these delays.

Trade barriers and market shrinkage have further exacerbated the textile industry's predicament. The escalation of secondary sanctions imposed by the US on Iran could not only cause a potential 60-70% drop in bilateral trade between China and Iran, but also exposes Chinese companies with business dealings with Iran to the risk of frozen accounts and restricted settlements. Many companies are forced to choose between the Iranian and US markets. Meanwhile, demand for textiles in the Middle East itself has plummeted due to the conflict, while global high inflation and low growth have led to a contraction in demand in Europe, the US, and emerging markets. Some buyers, seeking to mitigate risk, are shifting orders to Turkey, Bangladesh, and other regions, further diverting orders from Chinese textile companies.

It is worth noting that this situation has also made the industry more aware of the importance of supply chain resilience and product upgrades. Faced with cost and logistical pressures, many leading textile companies are accelerating their diversification efforts, reducing reliance on single markets in the Middle East and Europe, and leveraging the RCEP and the China-Arab States Free Trade Agreement to expand into emerging markets such as ASEAN and Central Asia. Simultaneously, they are increasing R&D investment, launching functional and environmentally friendly fabrics to enhance their bargaining power and avoid price wars in the low-end market.

For the textile industry, the situation between the US, Israel, and Iran presents both challenges and opportunities for industry reshuffling. In the short term, companies need to closely monitor the evolving situation, secure raw material prices, manage inventory, and develop logistical contingency plans to mitigate operational risks. In the long term, only by optimizing supply chain layouts and enhancing core product competitiveness can they maintain a foothold in the complex international environment.

This conflict in the Middle East once again underscores the close interconnectedness of the global textile supply chain. We hope the situation will ease soon, and that the textile industry can overcome its difficulties, find a way out of uncertainty, and achieve steady development.