Global methanol prices soar in response to Middle East war

Global methanol markets have reeled in the wake of the war in Iran, with prices in India reaching an over-four-year high on acute supply concerns, while Southeast Asia prices hit all-time highs.

In the Atlantic Basin, European spot prices have risen about 47% since the war started Feb. 28, despite unchanged fundamentals and minimal reliance on Middle East imports, while US prices rose only 18%, on a surge in spot liquidity.

The effective blockage of the Strait of Hormuz caused by the war has dramatically reduced global trade flows of crude, naphtha, and petrochemical feedstocks, with an estimated 18% of global methanol capacity affected, according to S&P Global Energy CERA data.

Asia

Southeast Asia methanol prices saw the sharpest escalation in Asia, as Saudi Arabia and Qatar, key methanol exporters to Asia, have been unable to move cargoes eastward.

Local supply was further tightened by concurrent plant outages and production issues across Southeast Asia.

Since the start of the war, Southeast Asia methanol prices have jumped 72% to $555/metric ton on March 20, marking the highest level since March 26, 2021, according to data from Platts, part of S&P Global Energy.

Prices in the region are the highest globally, Platts data shows. Prior to Feb. 28, Southeast Asia methanol values remained in $315-$325/mt range since August 2025, according to Platts data.

Chinese prices have also risen sharply, up 46.5% since Feb. 28 to $381/mt on March 20. The prices were last higher April 8, 2022, when they hit $390/mt, according to Platts data.

Traders said China is less exposed to war impacts than Southeast Asia, South Korea, or Taiwan, as local buyers have access to millions of metric tons in stocks, which participants say could cover at least eight weeks of demand. Additionally, at least three ships carrying methanol from Iran are en route to China, traders say.

With the Southeast Asia-China spread widening to $174/mt, the arbitrage into Southeast Asia has swung open.

Taiwan and South Korean prices have also risen amid supply concerns, with prices in South Korea hitting a 53-week high on March 13 and prices in Taiwan hitting the highest level in four and a half years, according to Platts data.

Indian methanol prices hit an over-four-year high on March 16 amid uncertain supply, following the announcement of a force majeure on shipments from Qatar and uncertainty around scheduled arrivals from Saudi Arabia and Bahrain.

With shipments almost halted from the rest of the Middle East – the majority supplier of methanol to India in 2025 -- participants looked to secure any spot cargoes available from Oman and elsewhere that supported spot prices.

Meanwhile, in the domestic market, ex-tank prices also rose almost 60% from the start of the war amid ongoing supply disruptions. However, in the second half of March, healthy port inventories and selling activity pressured prices.

Platts assessed CFR India methanol at $500/mt on March 20, the highest level since Oct. 27, 2021, Platts data showed.

Europe

Platts assessed the methanol FOB Rotterdam five- to 30-day forward spot price at Eur432.75/mt on March 20, the highest level since Jan. 13, 2025, Platts data showed.

Rising prices in China and India could pull volumes out of the Atlantic Basin if arbitrage opportunities emerge, diverting supply away from Europe.

As a result, buying activity in Europe increased, with at least 41,000 mt trading over March 2-18, compared with 16,000 mt traded during all of February, as players sought to cover short positions.

Additionally, a high volume of paper trades suggested players were hedging against price volatility.

Buyers were also maximizing their contractual offtakes to build stocks ahead of an anticipated increase in the European contract price for the second quarter.

Americas

While the US methanol market was slower to react to global supply restrictions, Platts FOB USG rose to a 14-month high on March 19 on a continued surge in spot liquidity.

At least 32,792 mt of spot methanol were heard traded from March 10-19, according to Platts data, with at least 90% of the deals bought by producers, according to multiple market sources.

As in Europe, supply balances in the Americas are less sensitive to disruptions at the Strait of Hormuz, but increased global competition due to lost Middle East production will eventually move the market.

"You can't take out that much methanol supply without some impact," a producer said.

Sellers in the US and Latin America are well-positioned to backfill Asian demand, given Europe's insufficient production capacity.

Restricted import supply in China is also expected to prompt higher prices in Latin America, with producers in Chile, Trinidad and Tobago, Venezuela, and Argentina standing to gain.

However, globally elevated freight rates and bunker costs are narrowing the arbitrage to Asia, market players say, with Medium Range tanker freight from the Americas to Asia heard roughly double pre-war levels, the producer said.

So long as higher logistics costs persist, the Atlantic Basin remains the best netback for sellers, according to a shipbroker.