The war in Iran and the ethanol, bioethanol and chemicals markets - what the blockade of the Ormuz means for Polish industry
The blockade of the Strait of Hormuz has turned the markets for oil, gas, fertilisers and petrochemicals upside down. We analyse how the conflict in Iran is affecting the price and availability of ethanol, bioethanol, isopropanol, MEK and organic fertilisers - products we produce in the IMA Poland on a daily basis.
Operation „Epic Fury” and the blockade of the Hormuz - a turning point
The twenty-eighth of February 2026 will go down in the history of commodity markets as a date comparable to 24 February 2022. Operation Epic Fury - a joint US-Israeli attack on Iran's military infrastructure - set in motion a chain of events, the consequences of which are being felt today by every ethanol, bioethanol or basic chemical production facility in Europe. The blockade of the Strait of Hormuz by the Revolutionary Guard Corps cut off 20% of global oil and LNG exports and about 30% of global fertiliser trade. The International Energy Agency described the situation as „the largest energy supply disruption in the history of the global oil market”.
For a company operating at the intersection of agriculture, fuel and chemicals, this crisis is not a macroeconomic abstraction. It touches our value chain directly - from the price of maize to the purchase of cereals, through the energy costs of the distillery, to the valuation of the isopropanol i MEK, which we distribute. IFPRI estimates, that the disorder affects up to 65-70% of global urea supply.
Oil, gas and the knock-on effect on production costs
Brent crude jumped from around $70 to over $120 per barrel in three weeks - a 50% increase. Dutch gas benchmark TTF doubled to over €60/MWh, which Reuters describes as the worst energy situation since Russia's invasion of Ukraine. Europe entered this crisis with gas reserves of just 30% of storage capacity - after an exceptionally cold winter of 2025/2026.
An industrial distillery is an energy-intensive plant. Distillation and rectification ethyl alcohol require significant amounts of heat energy. The increase in natural gas prices translates directly into production costs - for both rectified alcohol and bioethanol. At IMA Poland, we cover part of our energy requirements from our own biogas plant, which gives us a partial buffer. Producers without renewable energy sources are in a much more difficult situation.
The ECB has put planned interest rate cuts on hold, raising its inflation forecast and lowering its GDP growth projections. Energy-dependent economies - including Germany and Italy - could fall into technical recession by the end of 2026.
Bioethanol: the paradox of more expensive oil
Seemingly paradoxically, for manufacturers bioethanol conflict creates a short-term market opportunity. The mechanism is simple: the more expensive the oil, the higher the price of petrol at the stations, and thus the higher the economic value of ethanol as a fuel component.
This phenomenon FinancialContent describes as a „biofuel floor” - with oil at US$120/bbl, maize cannot fall below a certain price level because it becomes too attractive a feedstock for fuel production. Corn and soybean contract prices on commodity exchanges are rising - corn on Euronext has increased by 6% since the end of February, as reported by FXMag.
The US EPA has set record blending mandates for 2026-2027 - RIN 26.81bn in 2026. Reuters reports, that refiners are protesting, claiming that the mandates are driving up station prices in a war situation. If the US absorbs more domestic ethanol production, less goes to the export market, raising prices in Europe.
For IMA Poland, the situation is as follows: margins on bioethanol are increasing in the short term thanks to higher oil prices, but at the same time the raw material is getting more expensive (corn from our purchase of cereals) and the energy required to process it. The balance depends on the ratio - and on how long the conflict lasts.
Ethyl alcohol: cost pressures without biofuels protective cushion
Unlike in the case of bioethanol, the prices of ethyl alcohol for use Food, pharmaceuticals or cosmetics are not directly linked to the price of oil. This is not where the „biofuel floor” mechanism works. A rectified alcohol producer has higher energy and grain raw material costs, but cannot automatically translate these into a selling price at the same rate as a fuel producer.
The ethanol market in Europe operates under a contractual regime - multi-month contracts with industry customers (pharma, cosmetics, chemical industry) contain price clauses, but renegotiation takes time. Companies with shorter contract cycles react faster. Those with many months' worth of cereal stocks gain an advantage.
Manufacturers organic alcohol - such as the one we produce with TÜV Rheinland certification - can count on slightly less price sensitivity on the customer side. The premium and eco markets are less price elastic than technical ethanol.
Isopropanol and MEK - petrochemicals under direct impact
Isopropanol (IPA) i methyl ethyl ketone (MEK), which we distribute at IMA Polska, are petrochemical products made from propylene and butylene - derivatives of crude oil refining and paraffin cracking. Here the causal chain is the shortest: more expensive crude oil → more expensive paraffin → more expensive propylene/butylene → more expensive IPA and MEK.
C&EN (American Chemical Society) reports, that European chemical companies are raising prices from 20% to 30%. BASF announced immediate increases on ingredients for cleaning and industrial chemicals. Wacker Chemie is raising polymer prices from 1 April. Dow's CEO warned that petrochemical shortages from the Iranian war will fuel inflation until at least the end of 2026., estimating that it will take up to 275 days to rebuild supply chains.
QatarEnergy - a 14% producer of global urea and a key supplier of polyethylene, methanol and α-olefins - declared force majeure and halted production polymers, urea and methanol. Fewer raw materials in global circulation, higher spot prices, longer delivery times.
For IPA and MEK customers in Poland (paintshops, paint manufacturers, electronics plants, pharmaceuticals), this means an increase in supply costs. As a distributor, IMA Polska maintains stock levels - this gives us and our customers a buffer for the coming weeks, but with a prolonged conflict, increases will be inevitable.
Fertilisers: spiralling costs hit Fermrol and GOZ
The fertiliser market is reacting to the war in Iran with brutal immediacy. Approximately 30% of global nitrogen fertiliser exports pass through the Strait of Hormuz. Rabobank estimates a threat to even 50% of global urea and sulphur exports. Urea has become 77% more expensive since the beginning of the year. Russia halted fertiliser exports for a month, China cuts volumes.
The Rzeczpospolita reports, that Grupa Azoty in Puławy stopped accepting orders for nitrogen fertilisers for a few days, reacting to a jump in gas prices by as much as 50%. Polish farmers' sentiment fell to a record low, with the IRG SGH's Business Climate Index dropping 12.6 points to -26, the worst in the survey's 30-year history. Diesel exceeded 7 PLN/l.
For IMA Poland, this context has a dual meaning. We produce Fermrol organic fertiliser - a by-product of alcoholic fermentation, which fits the model of a closed-loop economy (GOZ). With synthetic fertilisers becoming rapidly more expensive, organic fertilisers are gaining in price competitiveness. Fermrol is not dependent on natural gas as a feedstock - its availability is driven by the volume of alcohol production, not by gas prices at the TTF.
At the same time, higher synthetic fertiliser prices could affect the cultivation decisions of farmers supplying us with grain. If farmers cut back on nitrogen fertiliser, yields could fall - and that means less supply of maize for the 2026/2027 season.We covered the topic of the carbon footprint in the supply chain in more detail in an article on the GHG emissions.
Green energy: a structural advantage in crisis
The March 2026 energy crisis exposed what the industry has been repeating for years: dependence on fossil fuels from geopolitically unstable regions is a systemic risk, not a theoretical one.
IMA Poland has been investing in a diversified energy base for years. Biogas plants and biomethane production powered by digestion residues allows us to cover part of the plant's energy needs from sources that do not pass through the Strait of Hormuz. The planned Sustainable Energy Centre and the development of biomethane production are operational safeguards whose value became tangible exactly on 28 February 2026.
Companies that treated decarbonisation and GOZ as „nice to have” are now counting how much the lack of energy diversification is costing them. The Guardian quotes British steel and chemical plant owners, who put it bluntly: „we are in survival mode”.
Scenarios: what next?
Further developments depend on one variable - the duration of the conflict.
Short scenario (diplomatic solution by May 2026)
Oil and gas markets retreat sharply. Corn and ethanol prices lose war premium. Fertilisers return to pre-conflict levels with a 2-3 month lag. IPA and MEK correct more slowly - Dow estimates up to 275 days for full normalisation of petrochemical chains.
Prolonged scenario (conflict through summer 2026)
Farmers in the northern hemisphere are making cropping decisions with record expensive fertiliser and fuel - this means lower grain yields globally. Maize prices could exceed US$6/bushel. Europe enters the second phase of the energy crisis, with the risk of recession in Germany and Italy. The chemical industry closes more plants. Ethyl alcohol and bioethanol prices rise structurally.
What does this mean for our customers and partners?
Transparency in communication with trading partners is essential in this situation. Below is the impact of the conflict on individual lines IMA Poland products:
| Product | Main channel of influence | Price direction | Availability |
|---|---|---|---|
| Bioethanol | Oil price (biofuel floor) + cost of corn + energy | Price increases, net margin growth uncertain | Stable - domestic production |
| Ethyl alcohol (rectified, ecological, pharmaceutical) | Cost of cereals + energy | Upward pressure on costs | Stable - raw material stocks |
| Isopropanol (IPA) | Propylene price (petrochemicals) | Growth 20-30% | Storage buffer, then voltages |
| Methyl ethyl ketone (MEK) | Price of butylene (petrochemicals) | Growth 20-30% | Like IPA |
| Fermrol organic fertiliser | Independent of gas as a raw material | Stable, gains vs. synthetics | Stable - derived from ethanol production |
| Feed components | Price of feed grains | Moderate growth | Stable |
| Green energy (biomethane) | TTF gas price (benchmark) | Increase in market value | Stable - in-house production |
IMA Poland's perspective
Three decades the distilling tradition in Murowana Goślina taught us one thing: commodity crises come in cycles, and resilience is built in quiet times. Product diversification (alcohol, biofuels, fertilisers, energy), certification under a number of standards (ISCC, KZR INiG, ISO 14001, ecological TÜV) and the investment in GOZ was no accident - it is a systemic preparation for just such moments.
This does not mean that the crisis will not affect us. It will affect every manufacturer in Europe. The difference is the depth of the buffer and the speed of adaptation.
Frequently asked questions
How does the war in Iran affect bioethanol prices in Poland?
The blockade of the Strait of Hormuz has raised the price of Brent crude oil to around US$120/bbl, which increases the economic value of bioethanol as a fuel component. At the same time, maize (the feedstock) and the energy required for distillation are becoming more expensive, so the net effect on producers' margins depends on the proportion of these changes.
Will there be problems with the availability of ethyl alcohol in Poland?
Polish producers, including IMA Poland, rely on domestic grain feedstock and do not import ethanol by sea via the Hormuz. Availability remains stable, while production costs increase through more expensive gas and grain.
Why are isopropanol and MEK getting more expensive because of the war in Iran?
IPA and MEK are petrochemicals produced from oil derivatives (propylene, butylene). The 50% increase in oil prices and the closure of Ormuz are directly increasing the cost of petrochemical feedstocks. European producers, including BASF and Wacker Chemie, have announced increases of 20-30%.
How can organic fertilisers be an alternative in the fertiliser crisis?
Organic fertilisers, such as Fermrol produced by IMA Polska, are created as a by-product of alcoholic fermentation. They do not require natural gas as a raw material, which makes them more resistant to the price crisis than synthetic fertilisers (urea, ammonium nitrate), whose production is directly dependent on gas prices.
Is biomethane gaining value as a result of the crisis?
Yes - benchmark TTF gas has doubled in price to over €60/MWh, raising the market value of biomethane as a replacement for fossil gas. Biomethane producers such as IMA Poland benefit from higher selling prices for renewable energy.
What does QatarEnergy's force majeure mean for the chemical market?
QatarEnergy has halted production of polymers, urea and methanol, affecting 14% of global urea supply. The result: fewer petrochemical feedstocks in global circulation, increased spot prices for IPA and MEK, extended delivery times by up to 275 days according to Dow estimates.
How long will the price crisis last?
With a quick diplomatic solution (by May 2026), energy markets will retreat within weeks, but petrochemical chains (IPA, MEK) need up to 275 days to normalise. With conflict continuing through the summer of 2026, the cost of producing alcohol, bioethanol and chemicals increases structurally.
Summary
The conflict in Iran and the blockade of the Strait of Hormuz are affecting every link in IMA Poland's value chain - from grain procurement, to ethanol and bioethanol production, to isopropanol and MEK distribution. Our structural advantages - biogas plants, Fermrol gas-independent organic fertiliser, multi-standard certification - soften the blow, but do not eliminate it.
We encourage our trading partners to contact us directly regarding delivery terms and price forecasts: IMA Poland contact form or by telephone on +48 61 307 02 10.
