Why rising oil prices could lead to hidden increases in plastic prices in 2026, and what that means for procurement

Rising oil prices rarely make headlines on their own. Their true impact unfolds behind the scenes along complex value chains. It is precisely there that a trend is currently emerging that many companies are struggling to make sense of.

Geopolitical tensions in the Middle East have recently led to significant fluctuations in the oil market . Crude oil is becoming more expensive, thereby affecting a wide range of downstream industries. Virtually all sectors are affected, as mineral fuels are typically consumed at the latest during the delivery of products and raw materials. The petrochemical industry is particularly affected, as its products serve, for example, as the basis for plastics.

Plastics are found virtually everywhere in the manufacturing industry. Packaging, housings, films, and insulation materials are often made from petrochemical precursors. When oil prices rise, the cost components of these materials’ cost structures also change.

What does this have to do with you?

Cost increases in the raw materials supply chain rarely occur in isolation. Intermediate products undergo several processing steps before they reach the purchasing department as plastic pellets or finished components. Each of these stages can pass on or amplify price changes.

As a result, many procurement departments are faced with a key question: To what extent—and, above all, when—do these effects actually materialize in procurement?

👉 A look at a simplified example makes things clear:

Imagine a spare fuel canister that is mass-produced. The cost structure might break down as follows:

Material costs (plastic pellets): 60%

Direct labor costs: 8%

Shipping costs: 8%

Shipping costs: 2%

Energy costs: 4%

Remaining costs/overhead: 18%

If, for example, the price of oil rises by 10 percent, this does not affect the final product to the same extent. The decisive factor is the proportion of petrochemical raw materials within the relevant cost drivers.

Typically, the cost of crude oil accounts for between 10 and 45 percent of total costs, depending on the type of plastic used. Assuming that 70 percent of the plastic pellets used are derived from oil-price-dependent raw materials and that material costs account for 60 percent of total costs, as described above, this trend would result in an overall cost increase of approximately 4.2 percent .

In addition, the price of oil also affects transportation costs. A significant portion of these costs is attributable to fuel, particularly diesel. Assuming that approximately 33 percent of transportation costs depend directly on the price of diesel and that transportation costs account for 8 percent of total costs, a 40 percent increase in the price of diesel would result in an additional impact of about 1 percent on total costs.

➡️ Overall, this could result in a total cost increase of about 5.2 percent.

However, looking at the situation in isolation does not tell the whole story. Delays in supply chains, existing supply contracts, and strategic price-fixing agreements mean that these effects often do not become apparent until months later. At the same time, factors such as changes in demand, inventory levels, and suppliers’ margin strategies play a decisive role. It is not uncommon for companies to raise prices as a precautionary measure in such situations.

This is precisely where the real challenge lies. Price increases often seem to come out of nowhere, even though their causes arose long before. As a result, purchasing departments face the task of identifying trends early on and evaluating them thoroughly.

A gut feeling isn't enough here. Transparency regarding raw material dependencies and cost structures is becoming a decisive competitive advantage.

So what now?

A closer look at our example shows that hidden price trends can have a significant impact, especially when multiple cost drivers are pushing in the same direction at the same time. At the same time, opportunities for action arise when these effects are identified early and managed strategically.

A key advantage arises from the fact that companies do not simply react once prices rise, but actively analyze trends in advance. Benchmarks, reliable data on commodity price trends, and customized calculations enable well-informed decisions.

👉 With the costdata® calculation tool, you can simulate cost structures in detail and evaluate changes objectively. The costdata® benchmark data provides an objective basis for price negotiations. The costdata® commodity price tracker offers transparency into current market trends. It helps you achieve full cost transparency during price negotiations, make market-driven decisions, and save time and negotiation potential.

What impact do you expect this to have on your company? Will rising oil prices have a noticeable effect on your plastic costs, or will the effects remain hidden for the time being?

It’s worth discussing these issues. For further insights and detailed analyses, visit www.costdata.de.