Navigating the path forward
Several strategies have already proven successful for the chemical and petrochemical industry in the Middle East to create greater resiliency. These strategies are focused on minimizing the risks associated with supply chain disruptions and improving flexibility to adapt to changing market conditions.
To start with, diversifying supply sources to overcome disruption should be a central strategy in any sourcing operation, especially in the chemical industry. Regionally, companies find benefits by strengthening regional partnerships across Gulf Cooperation Council (GCC) countries as ways to diversify, drive more innovation, and reduce risk.
Digital supply chain technologies are also making it easier to do business in the Middle East. Whether expanding supply chain partnerships or dealing with normal day-to-day shipping, the emergence of digital technologies is enabling greater flexibility and transparency for companies’ logistics operations.
Digital tools such as PSA BDP’s Smart Navigator increase supply chain transparency with real-time shipment tracking and predictive ETAs – information that is invaluable to keep supply chains operating efficiently.
One looming change to market conditions that could create opportunities for the Middle East is the geopolitics of other regions. The aforementioned U.S. tariffs could have big impacts on the chemical industries in Europe and China and, by extension, the Middle East. Also, the EU’s chemical industry is facing increasing regulations centered on sustainability, such as the Carbon Border Adjustment Mechanism (CBAM), which could impact chemical production and increase demand from the Middle East.
Two already observed impacts of these chemical market shifts include growing demand for Forward Hubbing solutions to create more flexibility and companies maintaining larger buffer stock.
