--- title: "The Middle East conflict reshapes the petrochemical industry, North American plants benefit, and U.S. concept stocks surge" type: "News" locale: "en" url: "https://longbridge.com/en/news/278966663.md" description: "The changes in the geopolitical situation in the Middle East are affecting the global petrochemical industry, with North American chemical manufacturers benefiting from low natural gas feedstock prices. Citigroup has upgraded the investment ratings of Dow and Lyondellbasell Industries NV from \"Neutral\" to \"Buy,\" expecting polyethylene prices to rise and profit margins to expand. 15% of global methanol production capacity is constrained, leading to tightness in the downstream market. Citigroup has raised earnings estimates for several companies, with Celanese being viewed as the preferred target" datetime: "2026-03-13T01:30:53.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/278966663.md) - [en](https://longbridge.com/en/news/278966663.md) - [zh-HK](https://longbridge.com/zh-HK/news/278966663.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/278966663.md) | [繁體中文](https://longbridge.com/zh-HK/news/278966663.md) # The Middle East conflict reshapes the petrochemical industry, North American plants benefit, and U.S. concept stocks surge The geopolitical situation in the Middle East has suddenly changed, severely impacting global energy flows and the landscape of petrochemical raw materials. Citigroup (Citi) pointed out that the blockade of the Strait of Hormuz has led to an imbalance in global petrochemical supply and demand, with North American chemical producers benefiting the most due to their advantage of low-cost natural gas feedstock. According to reports from Investing.com and Seeking Alpha, on the 12th, Citigroup decided to upgrade the investment ratings of chemical giants Dow and LyondellBasell from "Neutral" to "Buy." Citi analyst Patrick Cunningham noted that the outbreak of war in the Middle East has caused oil prices to fluctuate dramatically, leading to soaring petrochemical plant costs in Asia and Europe, and even forcing production cuts or shutdowns due to raw material disruptions. In contrast, North American chemical producers primarily use ethane derived from natural gas as feedstock, benefiting from the stable domestic natural gas supply in the United States. The widening price gap between natural gas and crude oil has allowed North American manufacturers to demonstrate strong cost competitiveness in export markets, especially in the polyethylene and olefins markets. Citi forecasts that the price of polyethylene is expected to rise by about 12 cents per pound in the first half of this year, before gradually returning to normal; this is expected to expand the gross margin per pound for producers by 4 to 8 cents, particularly for those with low-cost assets in the United States. At the same time, approximately 15% of global methanol production capacity is constrained in the Middle East due to the conflict, which will lead to tightening in the downstream acetyls and methyl tert-butyl ether (MTBE) markets. Benefiting from the improved outlook, Citi has decided to significantly raise the earnings estimates for several related large enterprises. Citi now predicts that LyondellBasell's earnings before interest, taxes, depreciation, and amortization (EBITDA) will be revised up by about 32% compared to previous estimates, mainly benefiting from the increase in polyolefin gross margins and the widening of derivative spreads; Dow's EBITDA has also been raised by 22%. Other companies favored by Citi include: Westlake with a 12% EBITDA upgrade for 2026; Olin with a 14% upgrade; and Eastman Chemical with a 9% upgrade. Additionally, Citi reiterated Celanese as the preferred target in this field, primarily due to the tightening supply of acetyl products driving up prices. U.S. petrochemical stocks surged across the board on the 12th. LyondellBasell, Dow, Westlake, Olin, Eastman Chemical, and Celanese jumped by 10.33%, 9.34%, 6.72%, 9.42%, 4.24%, and 14.75%, respectively. (This article is authorized for reprint by MoneyDJ News; the main image source: pixabay) ### Related Stocks - [Celanese Corporation (CE.US)](https://longbridge.com/en/quote/CE.US.md) - [Dow Inc. (DOW.US)](https://longbridge.com/en/quote/DOW.US.md) - [LyondellBasell Industries N.V. (LYB.US)](https://longbridge.com/en/quote/LYB.US.md) ## Related News & Research - [Aramco-Dow joint venture Sadara Chemical halts production over Middle East turmoil](https://longbridge.com/en/news/281141391.md) - [Plastic Bottle Makers Get Pinched by War-Driven Forces Majeures](https://longbridge.com/en/news/281413302.md) - [Grantham Mayo Van Otterloo & Co. LLC Has $17.38 Million Stock Holdings in LyondellBasell Industries N.V. $LYB](https://longbridge.com/en/news/278366996.md) - [Muhlenkamp & Co. Inc. Acquires 33,247 Shares of Celanese Corporation $CE](https://longbridge.com/en/news/276337996.md) - [Celanese Announces Polyamide Price Increase | CE Stock News](https://longbridge.com/en/news/273561444.md)