Summary and Key Points: Ask most people what an oil shortage looks like, and they’ll say expensive gas. They won’t say a bakery asking you to bring your own container, or a snack bag, suddenly printed in black and white. But that’s exactly what’s happening in Japan. The closure of the Strait of Hormuz has choked off the crude Japan turns into naphtha — the unglamorous petroleum derivative behind nearly all plastic, from packaging to medical supplies to the inks on a candy wrapper.
The Strait of Hormuz Crisis Expands
F-22 Raptor Reverse. Image Credit: Creative Commons.
Naphtha is a petroleum derivative used as the feedstock for plastics, adhesives, inks, and countless industrial products. Japan imports much of the crude oil used to make Naphtha from the Middle East, making it highly vulnerable to disruptions in that region.
A recent Guardian report showcases how Japan’s polyethylene production, which is the plastic used in shopping and garbage bags, was down 62 percent compared to last year. Supermarkets and bakeries are already changing how they package goods, and some businesses are asking customers to bring reusable containers.
When people hear that an oil shortage is underway, they just assume it will affect only the prices and availability of gasoline, diesel, and maybe jet fuel. They don’t think about the knock-on impacts. But crude oil is the foundation of the modern petrochemical economy. And Naphtha is a base element for that foundation.
Naphtha produces plastic packaging, which you know is everywhere; medical supplies rely upon it, and the material produces synthetic materials, adhesives, and industrial chemicals.
When this element becomes scarce, shortages appear everywhere–from the obvious places to the places people would never expect (or anticipate having shortages in). That’s why Japan’s snack companies are now switching to black-and-white packaging to conserve petrochemical-derived inks.
Yes, the shortages caused by the closure of the Strait of Hormuz are forcing the world to revert to black-and-white imagery. And that’s not the only regression of this oil shortage. Fuel prices are rising. And that’s bad enough for most people.
F-22 Raptor Firing Flares. Image Credit: Creative Commons.
But that’s just the start.
Systemic Crises
The shortages are causing systemic crises. Now, energy shortages are hitting mostly Asian countries, such as Japan. Over the next several months, though, there will be shortages globally (that will only compound the price hikes).
Due to the aforementioned naphtha shortages, global plastic packaging is being affected. That might sound like a ridiculous concern to you. But many of the world’s products are shipped in plastic packaging.
There are entire international business models centered around access to that packaging for shipping, etc. If that packaging is scarce, businesses must find new packaging, which will take time, lead to shipping issues, and undoubtedly spike the prices of any products that rely on plastic packaging (which is basically any product).
A shortage of naphtha will cause manufacturing disruptions, leading to inflation in consumer goods. That’s how supply-chain crises spread through the economy. A shortage of one feedstock cascades into dozens of industries.
A U.S. Air Force B-52 Stratofortress departs after being refueled by KC-135 Stratotanker over the Pacific Northwest July 18, 2024. The 92nd Air Refueling Wing and 141st ARW’s ability to rapidly generate airpower at a moment’s notice was put to the test when Air Mobility Command’s Inspector General team conducted a no-notice Nuclear Operational Readiness Inspection, July 16–18, 2024. During the NORI, Airmen demonstrated how various capabilities at Fairchild AFB enable units to generate and provide, when directed, specially trained and equipped KC-135 Stratotanker aircrews to conduct critical air refueling of U.S. Strategic Command-assigned strategic bomber and command and control aircraft. (U.S. Air Force photo by Staff Sgt. Lawrence Sena)
Why Japan is Especially Vulnerable
Japan is one of the world’s largest importers of Middle Eastern energy.
Unlike the United States, Japan lacks large domestic hydrocarbon resources and depends heavily on maritime supply routes. Analysts note that while Japan has substantial crude oil reserves, its naphtha reserves are much smaller–measured in weeks rather than months.
That means even if crude oil reserves exist, converting those reserves into sufficient petrochemical feedstocks can become a bottleneck.
Significance of Hormuz
Because of the blockade of the Strait of Hormuz, there are now plastic shortages in Japan. There are already packaging disruptions across Asia. Concurrently, there are massive cuts in petrochemical production.
All these factors have led to panic buying of things like garbage bags and packaging products. Meanwhile, Asia is already seeing–as is the rest of the world–the worst bits of manufacturing costs across consumer industries.
So, the Iran War that the United States and Israel started led to the predictable blockade of the Strait of Hormuz.
And because neither the American nor the Israeli militaries can fully defeat the Iranian defenders, the Strait has remained blockaded so long that some of America’s closest allies, such as Japan, are bearing the costs of that war.
If the disruption to the Middle East’s energy flows continues through the summer, as I suspect, today’s shortage of plastic bags could look like the opening chapter of a much broader petrochemical crisis across Asia–and then the world.
As Asia goes, so goes the rest of the world, after all. And it’ll be close friends, like Japan, that pay much higher prices than even rivals like China, which has some buffer between its economy and the growing shortages.
Once those buffers run out, though, China will experience higher prices, too, which will not just remain isolated in China. Those impacts will expand outward significantly.
About the Author: Brandon J. Weichert
Brandon J. Weichert is the Senior National Security Editor at 19FortyFive.com. He also manages The Weichert Brief on Substack. Weichert hosts “National Security Talk” on Rumble, too. He is the author of four bestselling national security books, the most recent of which is A Disaster of Our Own Making: How the West Lost Ukraine (Encounter Books). Follow him via Twitter/X @WeTheBrandon.
