It's dragging on longer than expected. Logistics costs and fabric costs inevitably have to rise, so we've started practical responses to minimize losses as much as possible.
The fashion industry, which had been watching the war with Iran that began in early Mar., has shifted from wait-and-see to loss mitigation. The change comes as the war between the United States and Israel and Iran drags on longer than expected. Companies running original equipment manufacturing (OEM) or original design manufacturing (ODM) fashion businesses, such as Hansae, Youngone, and Global Sae-A, are being hit.
Iran sent a message to the international community to brace for international oil prices rising to $200 per barrel and also announced that ships must obtain Iran's permission to cross the Strait of Hormuz. About 20% of the world's crude passes through the strait. Ships carrying Middle Eastern crude and petroleum products are currently halted. U.S. President Donald Trump has repeatedly sent the message that "we won (in the Iran war)," but there is still no sign the actual war is ending.
According to the retail industry on the 13th, most fashion companies are focusing on rising costs and closely reviewing measures such as loss reduction. The war has pushed international oil prices up to $100 per barrel, and if the war becomes protracted, prices could rise further.
When international oil prices rise, fabric prices inevitably rise first. That's because most of the raw materials needed to make synthetic fibers are petroleum-based. According to the 2025 Materials Market Report published last Sept. by Textile Exchange, polyester accounts for 60% of global fiber production.
Purified terephthalic acid (PTA), the raw material for polyester, is a white powder made by oxidizing paraxylene (PX) extracted from petroleum. With excellent heat resistance and wear resistance, it is used as a textile fabric.
A fashion industry official said, "As a rule of thumb, when Brent crude rises 10%, the price of PTA, a polyester raw material, rises 6% to 8% within a month," adding, "Recently, Brent crude exceeded $100 per barrel, and since this situation looks likely to continue, we are calculating that costs will rise."
Logistics costs are also a problem. The fashion industry sees logistics costs as a bigger issue than raw material costs for now. Existing fabric contracts can buy about three to six months, but ship fuel costs and air freight rates have already risen. They have taken a direct hit from higher oil prices.
Reduced cargo capacity is another problem. With Middle Eastern airspace closed and traffic through the Strait of Hormuz not running smoothly, cargo capacity has fallen by about 20%. In particular, export routes that pass through the Middle East from major garment-producing countries such as those in South Asia are also facing disruptions.
A fashion industry official said, "Ocean shipping is using detours, which delays transit time by 10 to 14 days, and container costs are at least 30% higher than before," adding, "Demand for transport to conduct trade is unchanged, but supply is not smooth, so costs inevitably grow. We are looking for solutions on multiple fronts to meet delivery deadlines."