The instability around the Strait of Hormuz has evolved beyond a matter of geopolitics and has become a cost story for packagers. For example, Brent crude climbed from approximately $69 a barrel before the February 2026 escalation to a peak above $138 in early April and has swung repeatedly through the summer as tension between the U.S. and Iran has flared and cooled. As of mid-August, oil trades near $95 a barrel, up sharply from the ~$70 seen only weeks earlier after a short-lived ceasefire.

The result is not a uniform increase in packaging costs but a series of overlapping shocks that move through each substrate differently. Plastic is most directly impacted through petrochemical feedstocks, while paper, metal, and glass absorb input cost increases through energy, freight, raw materials, and capacity constraints. For business owners and investors, the important questions are how quickly costs reach the converter, how long they persist, and how much can be passed through to customers.

Plastic Packaging Feels It First, and Hardest

Of all the materials utilized by packaging converters, plastic is the most directly tied to petrochemical and energy markets. The resins used to make most packaging components (polyethylene [PE], polypropylene [PP], polyethylene terephthalate [PET], and polystyrene [PS]) are refined from raw materials derived from oil and gas, although their exposure to crude oil varies by resin, production process, and region.

Crude alone does not explain the 2026 rise in resin prices. Middle East resin and precursor petrochemical volumes (e.g., ethylene, propylene, and paraxylene) have been stranded behind the Strait of Hormuz, tightening global supply and pushing resin prices up faster than the underlying feedstock costs. In Europe, Flexible Packaging Europe’s index shows biaxially oriented polypropylene (BOPP) film up 97% in the second quarter of 2026, PET film 40%, high-density polyethylene (HDPE) 38%, and low-density polyethylene (LDPE) 31%. U.S. polyethylene producers were less exposed to the immediate oil-price shock, but strong export demand pushed plants to approximately 98-99% utilization in March and April 2026, tightening domestic availability and pushing spot PE prices higher even as feedstock costs stayed comparatively stable. Inventories rebuilt in May, easing some of the pressure.

The conflict in the Strait of Hormuz has directly led to the rise in input costs. Roughly a fifth of the world’s oil normally passes through that waterway, and shipping traffic has dropped sharply each time fighting resumes, most recently after the U.S. reinstated a naval blockade in mid-July. Because higher material costs take 60-90 days to reach packagers, each flare-up resets the clock before the prior increase has cleared, leaving many converters absorbing one increase as the next arrives.

Exhibit #1: Oil Price Trend

Exhibit #2: Resin Price vs. Oil Price (Indexed to Jul-24)

Paper, Metal, and Glass are Not Immune

Paper, metal, and glass are not derivatives of plastic resin, but freight, energy, and metal commodity prices have all spiked, creating upward pressure on input costs for all packaging substrates. Qatar is one of the world’s largest exporters of liquefied natural gas (LNG), and its shipments must pass through the Strait of Hormuz. Paper, metal, and glass producers use natural gas mainly to generate energy during manufacturing, so higher gas prices raise their operating costs directly rather than passing through a multi-step production process.

Ocean freight prices are being moved by separate forces than the conflict. The cost per 40-foot container fell to $2,232 in late April as Asia-Europe rates softened amid weak demand and excess capacity, before climbing to $4,473 by August 27 amid stronger Transpacific demand and tariff-related frontloading. Rather than the conflict, excess capacity and trade policy appear to be driving these rates, so a settlement in the Gulf may not bring freight relief. In the near-term, the added cost is surcharge-led, with several carriers setting emergency fuel surcharges effective August 2026.

Containerboard Producers Push Through Higher Input Costs

Six of the largest North American producers, including International Paper, Smurfit Westrock, Georgia-Pacific, and PCA, pushed through two rounds of price increases in 2026, with $50-70 per ton increases announced across March and June. A third round is set for September 1, with PCA announcing an unprecedented $140 per ton increase effective that date. Company executives pointed to rising costs and energy pressure tied to the conflict in the Middle East on top of a wave of plant closures in 2025. Diesel, up roughly 50% from pre-conflict levels in 2025, continues to raise the delivered cost of both inbound wood and outbound finished boxes. Old corrugated containers (OCC), the recycled fiber that feeds containerboard production, have also risen sharply, from roughly $44 per ton in December 2025 to $70 per ton by July 2026.

Linerboard Pricing Is Decoupling From Recovered Fiber

Even as OCC has risen, finished containerboard pricing has moved further and faster, breaking the traditional relationship between the two. Historically, linerboard pricing was more closely governed by end-user demand and the underlying supply-demand balance, but suppliers are now pushing through increases amid a much broader set of cost and operating pressures. As a result, linerboard and OCC pricing have increasingly diverged, with freight, energy, wood, chemicals, and capacity constraints influencing finished containerboard pricing independently of movements in recovered fiber. What was once a relatively straightforward supply-and-demand relationship is now being shaped by multiple external shocks across the system.

Aluminum Faces a Second Layer of Cost Pressure

Metal has a more direct connection to the region. The Gulf region supplies approximately 10% of the world’s exported aluminum, and in March 2026, Iranian strikes damaged two major Gulf aluminum smelting facilities; the larger of the two does not expect full restoration until early 2027. Prices already touched $3,700-3,800 per metric ton in early June before retreating to current levels of ~$3,200; industry analysts note that a resumption of conflict-driven supply disruptions could push prices back toward that range. This estimate includes higher shipping costs and war-related insurance added on top of the base metal price. Smelting is power-intensive, adding another layer of costs wherever that power is gas-fired. Companies that produce cans and foil packaging, who were already dealing with cost increases from 2025 tariffs on steel and aluminum, are facing a second wave of cost increases on top of the first.

Glass Has the Longest Energy Exposure

Glass carries the highest energy intensity of the three. Melting runs continuously at high temperatures, so a furnace cannot be throttled against a price spike the way a converting line can be idled, and cost passes through with little delay. Some glass bottle manufacturers have reported supply and availability issues tied to the broader global energy squeeze, though the impact hasn’t been as clearly quantified in public reporting yet.

Exhibit #3: Cross-Material Comparison (Indexed to Jul-24)

Exhibit #4: 42-Pound Kraft Linerboard versus OCC Spread

What This Means for Business Owners and Investors

Given that the observed pattern consists of sharp spikes followed by partial retracements, the price shifts reflect repeated shocks rather than setting a new floor for future prices. However, easing is not the same as fading. Months of work-through remain, and repeated flare-ups continue to reset the clock before costs fully normalize. That base case also depends on the supply response, which is not the same for oil and gas. Oil can draw on short-cycle shale production and OPEC spare capacity available within months, while LNG liquefaction capacity takes years to build with no equivalent swing producer, positioning gas-linked inputs to normalize more slowly. Packagers weighted toward glass should plan on a longer recovery than the oil price trend in Exhibit 1 implies.

Contract Structure Could Separate Winners From Losers

Contract structure is the single largest differentiator across the sector. Companies with index-based or cost pass-through language are largely protected, while those without these structures absorb the increase directly and compound each month of delay against the 60-90-day repricing lag. However, pass-through is not automatic. Customers under their own margin pressure do not reliably accept increases, so the mechanism carries execution risk even where the contract permits it. That gap is surfacing in deal processes already underway, where buyers are asking pointed questions about a target’s contract structure and repricing speed rather than recent financial performance alone. The widening cost gap between substrates is also reviving substitution conversations that had stalled while prices were held stable.

Sources: CNBC, Al Jazeera, Reuters, Plastics Technology, PlasticsToday, Flexible Packaging Europe, GEP, Packaging Dive, Discovery Alert, Xeneta, Drewry, Suaid Global, Middle East Insider, The National, Wikipedia (2026 Strait of Hormuz crisis / 2026 Iran war fuel crisis), as of August 27, 2026