Iran Strikes Israel Over Weekend, Geopolitical Risk Surges, Oil Opens Sharply Higher Monday, Plastic Raw Material Costs Face Challenge
Market Daily — June 8, 2026
On June 5 (last Friday), international crude oil continued its decline: WTI July contract closed at $90.54/barrel (-2.69%), Brent August contract at $93.09/barrel (-2.04%). However, the Middle East situation took a sharp turn over the weekend — Iran launched multiple missile barrages at Israel, triggering air raid sirens across Israel, with Iran's armed forces signaling possible further action. Consequently, oil markets opened sharply higher on Monday June 8, as geopolitical risk premium swiftly returned.
Geopolitical Event: Iran Missile Strikes on Israel Escalate Tensions
According to SCI99's early morning report on June 8, Iran launched multiple rounds of missiles toward Israel over the weekend, setting off air defense sirens nationwide. Iran's armed forces indicated that further military action against Israel was possible. This marks another escalation in Middle East geopolitical risk, following the earlier tensions in the Strait of Hormuz. Market risk aversion surged as investors quickly priced in the risk of further crude supply disruption.
Earlier, market expectations of a US-Iran conflict resolution had overshadowed concerns about renewed conflict, driving crude futures lower. But the weekend missile attacks completely reshaped expectations, with geopolitical risk premiums returning in force.
Crude Market: Mixed Factors, Heightened Volatility Risk
Last Friday (June 5) crude settled notably lower as the market digested easing US-Iran tensions. However, Iran's military strikes on Israel over the weekend caught the market off guard, with oil prices gapping up at Monday's open. The market now faces multiple uncertainties: remaining differences in US-Iran negotiations, unconfirmed OPEC+ production increases, and renewed Middle East volatility — all contributing to significantly elevated near-term risk.
According to SCI99's petrochemical product change rankings, only 6 of 42 monitored products rose last session (14.3%), while 20 fell (47.6%). Acetone, PX, and PTA led gains; WTI, Brent, and naphtha led declines. Overall market sentiment remained cautious.
Plastic Raw Material Market: Cost Support Under Pressure
PE market: LLDPE prices were stable to slightly weaker on Friday. Futures rose then fell, sellers offered concessions to move volumes with offers edging lower. PP granular, PP powder, and LLDPE film grades all saw 0-50 CNY/ton declines. Off-season demand combined with low operating rates kept purchasing enthusiasm subdued, with thin transaction activity.
PA6 market: High-speed spinning chips in East China main reference 11,600-11,800 CNY/ton, market running stably. Caprolactam East China liquid market at 11,100 CNY/ton delivered on acceptance, flat.
Pure benzene: FOB Korea closed at $980-990/ton (-$7.5/ton); CFR China at $1,005-1,015/ton (-$7.5/ton). Weakening pure benzene exerted some drag on overall downstream plastic costs.
Outlook
Iran's weekend missile strikes on Israel represent the near-term biggest variable. If the Middle East situation intensifies further, oil prices may see a sustained rebound, providing support to plastic raw material costs. Conversely, if tensions ease, the geopolitical premium could fade, with oil still facing demand weakness and OPEC+ production increase expectations. Downstream demand remains in the traditional off-season with notable divergence across product segments. Close monitoring of Middle East developments and OPEC+ dynamics this week is recommended.
