The escalation of tensions between Washington and Tehran, which escalated into open armed conflict in March 2026, immediately shook commodity markets. While media attention is focused on fuel prices at the pump, the real drama may also unfold in the plastics processing sector. For the telecommunications industry, which relies on HDPE granules for the production of microducts and protective pipes, this will mean a time of drastic budget revisions. With the end of the already-delayed KPO/FERC projects, which have already been delayed by a harsh winter and the late start of the project, this could pose additional worries for investors.
Oil prices are rising, a prediction for the conflict
As a direct consequence of the attacks on energy infrastructure and the blockade of the Strait of Hormuz, oil prices rose by over 8% in a single day. It’s been a week since the US and Israel launched attacks on Iran and retaliated with attacks on countries in the region, targeting energy infrastructure and the blockade of the Strait of Hormuz. The last 12 months have been characterized by a downward trend, and earlier forecasts by institutions such as the EIA and JP Morgan for 2026 suggested an average price of $55-60 per barrel, with prices of $61-65/bbl still being paid in December 2025.
Current geopolitical events have completely turned the tables, and as of March 6, 2026, the price of a barrel of oil has risen, reaching levels above $90 (some sources pointed to around $91-92 at peaks, after an increase of over 7-8% during the day). TTF 1M gas prices have also risen above €50 per MWh, and many regional sources (including the largest Qatari producers) have announced reductions or suspensions in production.
The situation in the Strait of Hormuz, through which approximately 20 million barrels of oil flow daily, is crucial for future prices. In a short-term conflict scenario (2-4 weeks of fighting), the expected Brent crude price could reach $100-110/bbl. If the blockade of the Strait of Hormuz lasts longer than two weeks, Goldman Sachs predicts a permanent breach of the $100 barrier. In the event of a more sustained escalation (all-out war/permanent blockade), prices could exceed $120-150/bbl. Qatar’s Energy Minister warns that a production halt by Gulf exporters could push prices to $150, threatening a global recession. The least realistic de-escalation scenario (a quick ceasefire) assumes prices will return to standard levels of $76-80/bbl. UBS and Goldman Sachs analysts assume that once trade routes are cleared, the market will quickly return to supply and demand fundamentals, which suggest an average price in 2026 of around $72-76, which is still higher than the average prices in 2025.
Oil prices are rising, polymers are following suit
Because high-density polyethylene (HDPE) is derived from oil and gas, the price correlation is almost immediate. For manufacturers of casing pipes and microduct systems, where raw material costs account for up to 70% of the finished product price, the current situation is a worst-case scenario.
The last two years were a period of relative stability after the post-pandemic peaks, but the current conflict has brutally interrupted this trend. 2025 was marked by slight declines in primary raw material prices due to oversupply and weaker demand in Europe. The situation reversed sharply in the first quarter of 2026. Asian producers announced polymer price increases of INR 15,000/MT (approximately USD 180) on March 6, 2026, representing one of the largest increases in recent years. European producers (e.g., LyondellBasell, Sabic) have already announced that higher ethylene prices will be carried forward to March. Price proposals for European customers have increased by EUR 60-200/MT.
The situation will be exacerbated by the growing logistics crisis. Carriers such as Maersk and Hapag-Lloyd have suspended operations in the Strait of Hormuz. CMA CGM has introduced a war fee of $3,000 per container for cargo from the Middle East, which increases the price of pellets by approximately $120 per tonne in real terms. Preventive purchases will also drive up material prices. Processors (pipe producers) have already begun stockpiling, which, given limited imports from the Middle East (65% of GCC exports passed through the blocked port of Jebel Ali), will create an additional shortage of raw material supply in the market.
Perspectives for the microduct and casing pipe sector
In the case of HDPE casing pipes, micropipes and micropipe bundles, where granulate is the main production cost, March 2026 may certainly bring many unfavorable effects of the geopolitical situation:
- increase in production costs: a 15-20% jump in granulate prices within a week will translate into immediate price increases for casing pipes, visible immediately after the sale of current buffer stocks accumulated by producers and the reseller channel.
- end of fixed offers: most suppliers have withdrawn monthly price lists in favour of “price at time of shipment” offers or will introduce indexation clauses into contracts / offers depending on the prices of material indices on world exchanges.
- risk of delivery delays: the blockade of trade routes in the Middle East hinders the supply of additives and dyes necessary for the production of telecommunications tubes, which may hinder the production of tubes in non-standard colors.
- Pressure on FTTH investments: Higher material costs could slow the pace of fiber-optic network construction in Europe, where contractor margins are already under strong inflationary pressure.
- Impact on product quality: If the conflict lasts longer than a few weeks, the HDPE market may enter a phase of prolonged material unavailability, which may force the industry to seek alternatives in the form of regranulate (RHDPE), the prices of which have also begun to rise. This may be problematic in the Polish market, as legal regulations (Regulation of the Minister of Digital Affairs of June 2023) require the use of virgin materials in casing pipes and microducts. Therefore, in theory, only material derived from the regrind of HDPE pipes produced in-house can be used (depending on the interpretation of regulations). However, as the problem worsens and regranulate is used from various sources, this could lead to problems maintaining product quality.
Therefore, investors and manufacturers must be patient and take remedial steps quickly and in advance to prepare for uncertain scenarios related to the situation in the Middle East. Whether the turbulence in the raw materials market will impact the pace of fiber-optic network construction in Europe due to possible delivery delays will likely become clear soon during the April-May order peak, when contractors will enter peak production after the frosty winter.
