Singapore (VNA) - Naphtha - a key raw material used to make everyday plastic products, including medical supplies such as syringes and catheters, is facing supply uncertainty as tensions in the Middle East disrupt global oil flows.
Naphtha, a petrochemical derived from crude oil, is widely used to produce plastics found in items ranging from personal protective equipment to food packaging.
Much of the crude oil supplying refineries in Singapore originates from the Middle East and is transported through the Strait of Hormuz, a strategic maritime route that accounts for roughly 20% of global oil trade. Recent attacks targeting oil tankers in the region have disrupted shipping traffic, placing additional strain on supply chains.
Melvin Tan, Vice President of the Singapore Manufacturing Federation, said manufacturers are facing a “triple threat” of rising energy, logistics and raw material costs as fuel prices drive up electricity and transport expenses, while a tighter supply of feedstock like naphtha pushes up production costs.
Meanwhile, experts from the National University of Singapore Business School said the impact of oil supply disruptions could extend beyond manufacturing and plastics, noting that oil by-products are also needed to produce fertilisers, which are critical for food production.
Suppliers have reported that plastic product prices have already begun to increase and could surge by as much as 50% if disruptions persist.
Some Singapore-based companies have proactively expanded inventories and placed bulk orders to mitigate cost risks.
Shipping costs are also projected to climb, further intensifying price pressures. Many firms are shifting away from “just-in-time” inventory models toward higher stockpiling strategies, while seeking alternative supply sources in nearby areas such as Johor and Batam.
However, the Singaporean Ministry of Health has affirmed that no shortages of medical supplies have been recorded so far, thanks to sufficient national stockpiles and a diversified sourcing strategy. Pharmaceutical retailers likewise said prices and supply remain stable for now, though they are closely monitoring market developments./.
