Plastic Bags Vanish, Prices Double: How the Naphtha Crisis Is Reshaping Japan and South Korea

The everyday plastics that consumers in Japan and South Korea take for granted—garbage bags, food packaging, medical devices, even cheap toys from ¥100 shops—are disappearing. The culprit is not a manufacturing flaw or a sudden spike in demand, but a geopolitical bottleneck over 7,000 kilometers away. The effective closure of the Strait of Hormuz following US-Israeli military strikes on Iran on February 28, 2026, has choked off the supply of naphtha, a crude-oil derivative often called the "rice of the petrochemical industry" because it is the foundational feedstock for everything from ethylene to high-value synthetic resins . With more than 60% of Asia’s seaborne naphtha typically passing through the strait, the blockade has not only doubled prices but has begun to rewrite the daily routines of entire populations .

The Strait Closes, the Shelves Empty

The Strait of Hormuz disruption is not a temporary hiccup. Vessel traffic through the waterway collapsed by more than 95% almost immediately, as Iran threatened to attack any ship attempting passage . For Japan and South Korea, both heavily dependent on Middle Eastern energy, the consequences were immediate and severe. Naphtha spot prices, which hovered around $590 per ton before the conflict, surged to over $980 per ton—a roughly 66% jump—and some industry sources reported paying over $1,100 per ton . The result is a cascade of shortages that have moved from factory floors to supermarket aisles.

In South Korea, the crisis became visceral in late March when a supermarket in Hwaseong, Gyeonggi Province, posted a notice that standard-volume garbage bags were sold out . The symbol was potent: if a country cannot produce its own trash bags, the petrochemical supply chain is broken. South Korea’s top chemical firms, LG Chem and Lotte Chemical, had already alerted clients to possible supply suspensions for ethylene and ABS resin, the raw materials behind virtually every plastic product on the market . By late March, at least one naphtha cracker had completely shut down .

Japan, which sources over 90% of its oil from the Middle East, has seen a similar unraveling . Over a dozen companies, including major manufacturers like Toto, halted orders or slashed production, creating a public relations headache for a government that insists supplies are secure . The shortages have hit the food sector directly: naphtha-derived materials are so scarce that some companies cannot even print product names and ingredient labels on packaging . Consumers are being urged to avoid panic buying, but polling shows public concern is surging .

A Two-Week Warning and a Widening Ripple

Beneath the consumer-facing shortages lies a stark industrial reality. The petrochemical industry in both countries operates with critically low naphtha inventories. Multiple reports from mid-March 2026 indicated that South Korean producers held roughly a two-week supply of naphtha, the absolute minimum before crackers must idle . Japan’s naphtha inventories were similarly tight, limited to about two weeks, with producers unable to make up the shortfall using alternative feedstocks .

This is a structural vulnerability. South Korea imported 45%, or 26 million tons, of its annual 59-million-ton naphtha demand from the Middle East . Japan sourced 40% of its naphtha from the region before the strikes . With those routes cut, the scramble for alternatives—from Algeria, India, and the United States—has been frantic but insufficient. South Korea even purchased Russian naphtha for the first time in four years, made possible by a temporary US waiver, but a single shipment of 27,000 metric tons is a drop in the bucket compared to the millions of tons required .

The naphtha shortage is not occurring in isolation. It is part of a broader raw-material squeeze that includes aluminum and urea, both of which also rely on Middle Eastern supply chains . The IEA’s executive director, Fatih Birol, warned that the closure could create “the most serious energy crisis we have ever experienced,” merging the effects of two past oil shocks and the Ukraine war .

Governments Respond, but a Disconnect Lingers

Both governments have moved aggressively, deploying emergency measures that reveal the severity of the crisis:

South Korea imposed a complete five-month ban on naphtha exports effective March 27, 2026, and set price caps on gasoline (1,934 won/liter) and diesel (1,923 won/liter) . The government also announced the release of strategic oil reserves starting in April, designating naphtha as an economic security item to prioritize domestic allocation . A supply chain support center was launched to monitor daily-life items, and officials warned that further restrictions—including potential curbs on petrochemical product exports—were not off the table .

Japan initiated a second round of state oil reserve releases in May, following a first round in March that together provided around 50 days of consumption . Prime Minister Takaichi appointed Industry Minister Ryosei Akazawa to lead a dedicated task force for naphtha supply, and the government claims to have secured enough petroleum-derived naphtha to last into 2027, with imports expected to triple in May . Minister Akazawa went so far as to state that supply-chain bottlenecks could be cleared “within days” if logistics coordination improved .

Yet a glaring disconnect persists. While Tokyo and Seoul deliver reassuring messages, on-the-ground reports paint a different picture. In Japan, dozens of firms have contradicted official narratives by announcing actual or imminent order stoppages . In South Korea, the export ban preserves domestic stock but cannot conjure new imports, and the industry has warned that the restrictions “won’t be enough” to prevent further shutdowns if the Hormuz closure drags on . The petrochemical sector has transformed from a state of structural oversupply to one of acute shortage almost overnight .

The most unsettling aspect of the crisis may be how it exposes the invisible backbone of modern life. Naphtha is not a household name, but its derivatives form the fabric of daily consumption: syringes, food wrap, car parts, garbage bags. When the Strait of Hormuz closes, the question is no longer about energy security in the abstract. It is about whether a supermarket in Hwaseong has plastic bags to sell, and whether a factory can print a label on a bottle. For now, both answers remain uncertain.