European petrochemists have only one thing to pray for, states Peter Huntsman, CEO of Huntsman Corporation, which manages facilities across Europe, including Rotterdam.
“Events in the Middle East are pushing energy prices even higher, confirming how exposed the UK and Europe remain to external shocks,” Peter Huntsman noted for the Financial Times.
Peter Huntsman summarizes: it is time for the continent to choose whether it wants to retain its industrial strength or “become a geriatric Disneyland – a service economy where rich old people go on castle tours.”
LyondellBasell notes that energy costs in Rotterdam are now three times higher than their U.S. sites and could double if emissions trading rules are tightened. Industrialists are lobbying for relaxed rules, but there is little optimism. Although the sector has maintained a trade surplus of €31.3 billion in 2025, it has shrunk by €7.3 billion and holds solely on exports of specialty chemicals rather than basic manufacturing goods.
The conflict in the Middle East has provided some respite, paralyzing Chinese factories dependent on raw materials from the Gulf. But it has simultaneously jacked up energy costs and triggered volatility in the price of critical components such as naphtha. This set off a chain reaction in all petrochemical markets.
Petrochemical clusters under threat
Chemical companies operate in clusters using common infrastructure. One company’s product often becomes a raw material for its neighbor. Even if the crisis has helped some European producers, a peace agreement could “bring all the problems back,” says James Hooper, senior chemical industry analyst at research firm Bernstein.
Besides, Europe’s fundamental problems haven’t gone anywhere: high energy prices, the abandonment of Russian gas by 2027 and the rising cost of carbon credits. If factories close, a domino effect will begin. Yvonne van der Laan, executive vice president of the US chemical group LyondellBasell, warns:
“Closing key plants effectively takes the heart out of integrated production chains. Once the decay process begins, the collapse of the entire ecosystem is only a matter of time.”
