Singapore Petrochemical Exports Fall 22.5% as Hormuz Feedstock Squeeze Enters Sixth Month

Singapore's petrochemical exports dropped 22.5% year on year in July 2026, falling to S$809.6 million or roughly US$633.6 million, according to trade data published by Enterprise Singapore on 17 August 2026. The decline confirms that the feedstock squeeze created by the closure of the Strait of Hormuz has now been weighing on the city-state's chemical sector for close to six months, well beyond the short shock that many traders expected in March.

The July reading follows a 27.9% fall in June and a 17.8% drop in March, the first full month after the Middle East war began on 28 February 2026. Petrochemicals have therefore become one of the most damaged parts of Singapore's export base at a time when the overall trade picture looks unusually strong. Total non-oil domestic exports, known as NODX, grew 24.2% year on year in July after a 20.8% rise in June, marking an eleventh consecutive month of expansion.

That headline number hides a sharp split between two very different Singapores. Electronics exports jumped 112% in July, lifted by disk media products, personal computers and integrated circuits as data centre operators kept buying hardware for artificial intelligence workloads. Non-electronic exports fell 2.3% over the same month, dragged down by pharmaceuticals at minus 56.7%, petrochemicals at minus 22.5% and food preparations at minus 17.9%. In other words, the AI boom is masking a genuine industrial problem rather than solving it.

The root cause sits about 6,000 kilometres away. Asian steam crackers source more than 60% of their naphtha, the light oil fraction that feeds plastic production, from Middle Eastern suppliers, and most of those cargoes normally move through the Strait of Hormuz. After the United States and Israel struck Iran on 28 February, commercial traffic through the waterway collapsed. Singapore's PCS issued a formal force majeure notice to its customers on 5 March, and Aster Chemicals and Energy, the Chandra Asri and Glencore venture that runs the Bukom refining and petrochemical complex, followed one day later with its own force majeure covering ethylene and propylene. South Korea's Yeochun NCC and Indonesia's Chandra Asri had already taken similar steps.

Six months later the waterway has not reopened. Transits remain a small fraction of the roughly 130 to 140 vessels that crossed daily before the war, and shipping monitors recorded a further drop after Iranian strikes on commercial vessels began on 7 July. A memorandum of understanding signed in mid-June collapsed, a United States naval blockade was reinstated, and Tehran has publicly tied any reopening to the lifting of sanctions. Brent crude has traded between the high 80s and low 90s in US dollars per barrel through August, keeping cracker margins under pressure even where feedstock can be secured.

Local factors have amplified the export slide. ExxonMobil permanently shut the older of its two Jurong Island steam crackers during the first half of 2026 as part of a global capacity reduction, removing a block of ethylene and downstream output from the island. Aster scheduled maintenance on at least one crude unit and one steam cracker at Bukom for August, which will hold Singaporean volumes down again in the current month. Earlier in the year, two of the three refineries operating from Jurong Island had already reduced throughput because of constrained crude availability.

The consequences reach far beyond Jurong Island. Singapore supplies polymers, solvents and intermediate chemicals to converters across Southeast Asia, and its shipments feed packaging, coatings, adhesives, automotive parts and consumer goods manufacturing.

For procurement teams, the practical reading is that Singapore remains a reliable trading hub overall but an unreliable source of petrochemical volume until Hormuz traffic normalises. Contracts covering ethylene, propylene and their derivatives out of Singapore should be treated as exposed to further force majeure notices, and buyers with single-source exposure to Jurong Island have a clear case for qualifying a second supplier outside the Middle East feedstock chain. The August data, due in mid-September, will show whether the Bukom maintenance period pushes the annual decline back toward the levels recorded in June.