Lead: US-Iran face-to-face talks in Rome on May 25 sparked hopes of Hormuz Strait reopening. International oil prices crashed 7%. WTI July settled at $89.90/bbl (-6.94%); Brent July at $96.14/bbl (-7.15%). Plastics cost support collapsed rapidly, PVC and polyolefins under pressure.
I. Crude Oil: 7% Plunge on Peace Talk Hopes
ICE WTI Jul 2026 settled at $89.90/bbl, down $6.70 (-6.94%), range $89.46-93.93. Brent Jul settled at $96.14/bbl, down $7.40 (-7.15%), range $95.30-99.60.
Key Price Data
| Contract | May 25 Settlement | Change |
|---|---|---|
| WTI Jul 2026 | $89.90/bbl | -6.94% |
| Brent Jul 2026 | $96.14/bbl | -7.15% |
Drivers
- US-Iran Rome talks: Face-to-face negotiations ongoing. No peace deal yet, but market pricing Hormuz reopening probability rising.
- Hormuz reopening expectations: ~20% of global oil shipments transits Hormuz. Reopening would eliminate significant risk premium.
- Risk asset selloff: Improving sentiment triggered broad commodity unwind.
II. Plastics Cost: Rapid Collapse
7% oil drop accelerated cost transmission to polyolefins chain. Naphtha CFR Japan down ~$30/t; ethylene CFR NE Asia down ~$40/t.
III. Outlook
Crude: Direction depends on talks outcome. Hormuz deal to WTI toward $80-85. Deal failure to quick rebound above $100.
Polyolefins: Rapid cost decline. LLDPE East China 7,900-8,100 yuan/t, PP T30S 7,300-7,500 yuan/t, bias lower.
