Material Insights · Understanding the Material World

Crude oil and Textiles and leather

Polyester, made from oil-derived PTA and MEG, was 59% of the world's fibre in 2024, so crude prices feed straight into the cost of most textiles and decide how cheap synthetic fibre is against cotton.

Crude oil (energy) and Textiles and leather (industry): 4 relationships.

How they are linked

1. Feedstock for polyester

Physical flow · Strong · Crude oil → PTA and MEG → polyester and nylon

Polyester is made by reacting PTA and MEG, which come from refinery and petrochemical streams, so crude is the root feedstock of the largest fibre; the site rates it 4 of 5 on criticality for polyester and nylon fibre producers.

  • 4 of 5 criticality for polyester and nylon fibre producers
  • 59% polyester share of world fibre output, about 78 Mt of 132 Mt in 2024
  • 88% share of polyester that is fossil-based, 2024

Polyester output rose from about 71 Mt in 2023 to about 78 Mt in 2024, and world fibre output has more than doubled since 2000, with most of the growth in polyester. Recycled polyester covers only about 12% of polyester, so the link to oil remains strong.

Enterprise types that depend on it:

  • Polyester and nylon fibre producers: root feedstock for PTA and MEG (criticality 4 of 5)

Sources: Material Insights; Textile Exchange; Cyprus Mail (Reuters)

2. Oil price into fibre price

Cost and price · Strong · Crude and petrochemical prices → polyester fibre and yarn prices

PTA and MEG are the main raw materials for polyester and are made from oil-derived streams, so fibre and yarn makers reprice within weeks of an oil shock.

  • nearly 30% rise in PTA and MEG feedstock costs paid by an Indian polyester yarn maker, spring 2026
  • ₹100 to ₹126.5 a kg Indian polyester staple fibre price, end-February to end-March 2026
  • 15.5% thread price rise announced by Coats Bangladesh from 15 April 2026

The rise followed the closure of the Strait of Hormuz in 2026. Indian polyester staple fibre eased to ₹120 a kg by 9 April after India cut import tariffs on petrochemical raw materials, which shows that tariff policy can cushion part of the pass-through.

Sources: Cyprus Mail (Reuters)

3. Synthetic versus natural

Substitution · Medium · Polyester competes with cotton

Spinners and fabric makers can shift blends between polyester and cotton, so the price gap between the two decides which fibre gains share; cheap oil makes polyester cheaper.

  • 19% cotton share of world fibre output, 2024
  • about 78 and 40 to 45 US cents a lb average cotton and polyester staple prices, January to September 2025

The cotton to polyester price gap briefly exceeded 120 US cents a lb in 2010-11, and cotton's share of fibre demand has declined gradually since as mills moved to synthetics; the gap narrowed from 49 cents in 2023 to 41 cents in 2024. A rise in oil prices narrows it further and helps cotton, which matters for India, which grows cotton and makes polyester.

Sources: Textile Exchange; International Cotton Advisory Committee (ICAC)

4. Gulf supply shock

Shared risk · Medium · Strait of Hormuz → Asian polyester mills

Polyester is directly exposed to the squeeze on oil-derived products when the Strait of Hormuz closes, and Middle East petrochemical supply is disrupted, so costs rise and output falls in textile clusters.

  • 10,000 to 3,500 to 4,000 metres a day fall in daily output at one Surat polyester weaver after the 2026 conflict began

Half of that weaver's 200 looms were idle after the conflict began, and Surat dyeing and printing units moved to shutting two days a week.

Sources: Cyprus Mail (Reuters)

For investors

Key learnings

  1. Polyester is 59% of world fibre and 88% fossil-based, so oil prices set the cost base of most of the textile industry.
  2. Pass-through is fast: Indian polyester staple fibre rose by more than a quarter in a month after the 2026 Hormuz closure.
  3. High oil prices narrow polyester's price lead over cotton, which can move blend demand back towards cotton.

What to track

  • PTA and MEG prices: Lead polyester fibre and yarn prices (Weekly · Reliance price lists, ICIS)
  • Polyester staple fibre versus cotton price: Shows which fibre is gaining share in blends (Weekly · Cotlook A, Wood Mackenzie)
  • Brent crude: Sets the direction of petrochemical feedstock costs (Daily · ICE)

For policymakers

Key learnings

  1. India's man-made fibre chain, from Surat weavers to yarn makers, carries oil price risk directly, as the 2026 loom idling showed.
  2. Import tariffs on PTA, MEG and other petrochemical inputs are a quick lever: their 2026 cut was followed by a fall in Indian polyester staple fibre from ₹126.5 to ₹120 a kg by 9 April.
  3. India grows cotton and makes polyester, so oil shocks shift advantage between two domestic industries rather than simply raising costs.

What to track

  • Import duties on PTA, MEG and polyester inputs: Changes the cost of domestic polyester (As notified · CBIC, Ministry of Finance)
  • Loom and processing unit utilisation in Surat: Early sign of stress in the man-made fibre chain (Monthly · Ministry of Textiles, industry bodies)

India

India grows cotton and makes polyester at scale; the 2026 Hormuz shock raised Indian polyester staple fibre from ₹100 to ₹126.5 a kg in a month and idled looms in Surat.

Sources

  1. Textiles and leather: materials, Material Insights (2026)
  2. Materials Market Report 2025, Textile Exchange (2025)
  3. Iran war hits Asia's polyester suppliers to global fast fashion, Cyprus Mail (Reuters) (2026)
  4. Cotton: Review of the World Situation, November 2025, International Cotton Advisory Committee (ICAC) (2025)