Dow CEO Warns of Year-Long Recovery for Strait of Hormuz Logistics

The recovery of global energy and petrochemical supply chains following the closure of the Strait of Hormuz will be a prolonged process, according to Dow CEO Jim Fitterling. Speaking on CNBC, Fitterling noted that even if the waterway reopened immediately, clearing the resulting logistics bottleneck could take 275 days or more. The strait, a critical chokepoint for global trade, effectively shut down in early March amid the onset of conflict in Iran. This closure has severely restricted the flow of energy and chemical inputs, creating a complex operational challenge that involves repositioning empty vessels and clearing the Arabian Gulf. The impact on the petrochemical sector has been acute. Fitterling reported that while 20% of global oil capacity was shut in, approximately 50% of global ethylene and polyethylene production was affected. Furthermore, 40% of the naphtha used in European and Asian production typically flows through the strait, leading to immediate supply tightening. This supply crunch has driven a decade-high surge in pricing. Costs increased by 10 cents per pound in March, 30 cents in April, and an additional 20 cents in May. While these pricing tailwinds supported Dow's first-quarter results—resulting in a smaller-than-expected loss and a 65% year-to-date share price increase—the broader industrial recovery remains distant.