WPC 2026 HIGHLIGHTS: Chemical markets set their sights in supply disruptions, AI

This content is part of a series exploring key themes from the World Petrochemical Conference being held in Houston from March 23-27.

At the World Petrochemical Conference on March 25, participants examined how the war in the Middle East is reshaping industry perspectives on supply. Leaders also voiced concerns that existing regulatory barriers are complicating efforts to address the ongoing downturn in Europe. In addition, the emergence of artificial intelligence was highlighted as a promising avenue that opens new opportunities to enhance efficiency across the value chain.

Supply shock from Middle East tensions

Paul Gruenwald, Global Chief Economist at S&P Global Energy, said that chemical markets began 2026 within a context of desynchronized economic narratives across China, the US, and the Eurozone, each exhibiting different growth rates and market conditions.

Then the war in the Middle East rocked supply chains creating a "supply shock, which is different from a demand shock. And now with the supply shock, we are seeing prices rise." The impact to markets is expected to last even after the tensions are resolved.

Carlos Pascual, S&P Global Energy's senior vice president of geopolitics and international affairs, said that a lot of the oil production facilities and supply infrastructure in the Middle East and specifically in the Persian Gulf will be difficult to restart. "Some of those problems might even take years to resolve," Pascual said.

Under this scenario, Jim Burkhard, Vice President and Head of Oil Markets Research at S&P Global Energy, warned that the pricing pressure across commodities is likely to persist long-term after the war in the Middle East ends.

The disruption in supply chains goes beyond the immediate region around the Middle East. Janet Kong, CEO of Hengli Petrochemical International, noted that, with Middle East exports nearly halted, buyers are scrambling for alternative cargoes, creating pressure points far away from the conflict. "Everyone wants to buy from the US Gulf coast but there are only three ports," Kong said.

After the long-lasting effects begin to disappear, participants foresee a return to the challenging conditions seen over 2025.

"Whenever the situation normalizes, we will return to an oversupply," said John Roberts, managing director at Mizuho Securities USA, which would bring the sector back to a familiar problem after the post-war normalization.

Europe's challenges and AI opportunities

Beyond the war, chemical leaders keep focused on how to address the challenges that have pushed Europe to rationalizations and optimizations, responding to global overcapacity pressures.

"Europe needs to do a better job protecting its industries, like petrochemical, automotive," said Peter Huntsman, President and CEO of Huntsman, while OMV's CEO and chairman Alfred Stern said, "we want to make feedstock more cost competitive and invest in our crackers to lower costs."

Standing in the way, however, are regulatory hurdles that are making investments more difficult. "Europe is losing competitiveness and there is a high bar for sustainability," said Adriano Alfani, CEO of Versalis. "That means you have to invest in innovation, new capacities. But if you don't create policy conditions to invest, it becomes really difficult. And you cannot wait, otherwise you lose the opportunities. We need a framework to simplify investments."

Rainer Seele, president of XRG, agreed with Alfani during the panel, adding that if governments delay approvals for investments, companies lose the chance of advantages such as cost-effective feedstocks.

Beyond crafting regulations that enable faster and easier investments, participants are also looking at the opportunities presented by AI. Implementation, said business leaders, doesn't have to be focused on the newest innovations either.

"Small improvements, even 1–2% efficiency, can materially improve profitability," said Claudine Mollenkopf, Chief Operating Officer for advanced technologies at Evonik Industries. She added that competitive advantages from AI should also stem from workforce capabilities and cultural shifts, not tools alone.