Impacts of the Iran Conflict on Global PPE Supply Chains.
The Iran conflict has disrupted the Strait of Hormuz, one of the world's most critical oil chokepoints. The strait handles approximately 20% of global oil consumption, with 84% of its crude oil flows destined for Asian markets.
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Strait of Hormuz Status Restricted
- Strait Status at a Glance: The Strait of Hormuz remains effectively closed to normal commercial shipping under competing blockades. Iran restricted passage beginning February 281 and the U.S. imposed a naval blockade on Iranian ports on April 132, reducing transit to a fraction of pre-conflict levels. The U.S. launched Project Freedom on May 4 to escort neutral merchant vessels3 but paused it May 6 citing progress toward a deal4.
- Vessel Traffic: Traffic has run at roughly 5%–10% of the pre-war average across April and May5. On May 24, 16 transits (8 inbound and 8 outbound) were recorded versus a pre-conflict average of ~178 per day6.
- Insurance & Shipping Economics: War-risk premiums have surged from ~0.25% to 3%–8% of vessel value ($3M–$8M per large tanker transit). Some insurers have withdrawn hull war cover entirely7. Some insurers have withdrawn hull war cover entirely8. The U.S. DFC established a $40B reinsurance facility9, but insurers will require months of sustained stability before restoring normal terms10.
- Negotiations & Ceasefire: The April 8 ceasefire remains in place. Both sides have agreed in principle on broad elements of a memo of understanding that would reopen the Strait of Hormuz and set a 60-day framework for nuclear talks, though final terms remain unresolved11.
The Impact of Crude Oil on Nitrile Glove Costs
The cost of manufacturing a nitrile glove is made up of eight components. Five of those are directly linked to the price of crude oil, representing roughly 76% of total glove costs.
An Estimated 76% of glove costs are directly impacted by crude oil price.
* Approximate cost structure based on generic 3.5g nitrile gloves
Nitrile Glove Potential Stabilization Timeline
Return to normal stabilization will likely lag easing of energy movement by ~9-12 months, but long-term prices likely to remain elevated pre-conflict norms.
Day 1
Strait of Hormuz Restored
Strait of Hormuz vessel traffic normalizes.
Month 1-4
Feedstock Supply Stabilizes
Butadiene and acrylonitrile stabilizes and NBR costs reduce over time as damaged infrastructure repairs.
Month 5+
Restored Finished Goods Prices
Manufacturers incorporate lower cost NBR, reducing FG pricing toward pre-conflict norms.
Month 6-10
Lower-Cost Products Hits US Supply Chains
Lower-cost product enters the US Supply chain and cycles through 2-3 months of FIFO inventory.
Month 11+
End Users see reduced prices
Reduced-cost product begins reaching end user facilities.
Day 1
Strait of Hormuz Restored
Strait of Hormuz vessel traffic normalizes.
Month 1-4
Feedstock Supply Stabilizes
Butadiene and acrylonitrile stabilizes and NBR costs reduce over time as damaged infrastructure repairs.
Month 5+
Restored Finished Goods Prices
Manufacturers incorporate lower cost NBR, reducing FG pricing toward pre-conflict norms.
Month 6-10
Lower-Cost Products Hits US Supply Chains
Lower-cost product enters the US Supply chain and cycles through 2-3 months of FIFO inventory.
Month 11+
End Users see reduced prices
Reduced-cost product begins reaching end user facilities.
Day 1
Strait of Hormuz Restored
Strait of Hormuz vessel traffic normalizes.
Month 1-4
Feedstock Supply Stabilizes
Butadiene and acrylonitrile stabilizes and NBR costs reduce over time as damaged infrastructure repairs.
Month 5+
Restored Finished Goods Prices
Manufacturers incorporate lower cost NBR, reducing FG pricing toward pre-conflict norms.
Month 6-10
Lower-Cost Products Hits US Supply Chains
Lower-cost product enters the US Supply chain and cycles through 2-3 months of FIFO inventory.
Month 11+
End Users see reduced prices
Reduced-cost product begins reaching end user facilities.
* Return to normal likely to be more nuanced as logistics easing in the Strait of Hormuz and infrastructure repairs will be gradual.
Critical Metrics to Watch
Vessel traffic and insurance premiums will be the earliest signals of whether conditions are genuinely improving.
- Daily vessel traffic and war-risk vessel insurance premiums are early indicators of Strait of Hormuz viability.
- Recovering vessel counts and reductions in insurer coverage costs will signal improving energy flow.
- Even as transit improves, full supply chain normalization — freight patterns, inventory, and supplier confidence — will likely take months.
* No Data for May 18
Supply Chain Impact
Global Market Overview
This disruption is cascading into the global PPE supply chain, driving volatility in petrochemical-based raw materials like polypropylene and Nitrile Butadiene Rubber (NBR) while increasing costs and delays for finished goods due to higher energy prices and constrained shipping routes. Note: “RM” = “Raw Materials” and “FG” = “Finished Goods.”
Gloves
Limited flow of crude oil impacting NBR availability
Manufacturers are sourcing NBR at highly elevated prices
FG output slowed in April and May planning. Expected to continue in June.
Cost of nitrile gloves have risen April and May production planning. Expected to continue in June.
Gowns
Supply of raw materials remains stable
Resin prices increasing, translating to an increase in RM price
Manufacturer production remains stable
Potential for future market price adjustment due to RM cost
Masks
Supply of raw materials remains stable
Resin prices increasing, translating to an increase in RM price
Manufacturer production remains stable
Potential for future market price adjustment due to impact on production cost (vary by product)
PRIMED’s Approach to Supply Chain Resilience
PRIMED is actively monitoring the situation and are uniquely positioned with well-established measures in place to support continuity across all products.
Strategic Safety Stock
Maintaining strong inventory levels across all key categories to buffer against potential disruptions and ensure consistent support for our committed customers.
Upstream Partnership Integration
Ensuring ongoing communication with manufacturing and raw material partners to secure priority access to supply and anticipate production changes.
Logistics & Route Optimization
Collaborating closely with freight partners to optimize shipping lanes and bypass global bottlenecks.
Continuous Risk Assessment
Constant internal reviews to rapidly adjust our supply chain as the situation evolves.