Consumers typically encounter oil pricing in one apparent place: at the gas pump.
And rarely does it end there.
Oil and natural gas are the building blocks of plastics, paints, varnishes, fertilizers, and countless other things that Americans see and use every day. That link has taken on added significance as warfare around Iran has hindered shipments through the Strait of Hormuz.
A new Bank of America note finds that oil prices are now explaining a fairly big share of daily fluctuations in several chemical equities.
For LyondellBasell Industries (LYB), Dow (DOW) and CF Industries (CF), roughly 35% of daily share-price variation has been statistically tied to crude since the conflict intensified, up from about 12% beforehand. For LyondellBasell, the figure reached 40%.
That’s not just Wall Street statistical mumbo jumbo.
The U.S. Energy Information Administration said 20.9 million barrels a day of oil and petroleum liquids traveled through Hormuz in the first half of 2025, or nearly 20% of global petroleum consumption and a quarter of global seaborne oil trade.
When that artery is pinched, the ripple can affect everything from a gallon of paint to the plastic wrap over food.
The Strait of Hormuz disruption changed the oil equation
It is difficult to overestimate the scale of this year’s disruption.
Hormuz oil flows averaged barely 4.9 million barrels per day in the second quarter of 2026, down from 21.6 million barrels per day in the fourth quarter of 2025, the EIA said.
That helped push crude prices considerably up and made them much more volatile.
Brent crude hit $105 a barrel on July 23 as attacks on tankers resumed and supplies through Hormuz fell, the EIA reported.
Higher oil prices aren’t necessarily a bad thing for makers of commodity chemicals.
U.S. firms are more reliant on comparatively low-cost natural gas liquids as raw materials, whereas many foreign companies are more dependent on oil-linked inputs. When the price of crude rises, the global cost curve can shift in favor of U.S. producers.
That’s one reason BofA found LyondellBasell’s post-conflict correlation with oil went from 0.38 to 0.63, Dow’s from 0.32 to 0.58.
More Oil & Gas:
- Goldman Sachs doubles down on oil price forecast for 2026
- Drivers lose control over gas price squeeze
- A big shift in the U.S. energy market is about to happen
On days when crude swings more than 2%, oil could account for over half of LyondellBasell’s stock fluctuations, BofA found.
Paint stocks are reacting in the opposite direction
Paint may be the more intriguing consumer tale.
Before the Hormuz disruption, oil prices explained less than 1% of daily moves in Sherwin-Williams (SHW), according to BofA.
Then that number rose up to about 39%, and the link was really negative.
Why?
Paint producers purchase solvents, resins, and other petroleum-derived ingredients. Oil prices are rising, but it takes time to raise prices when companies’ costs are rising.
Such conditions can momentarily squeeze margins.
The pattern has also appeared in PPG Industries (PPG), RPM International (RPM), Axalta Coating Systems (AXTA) and Ecolab (ECL).
And the raw-material link is no longer hypothetical.
S&P Global says the Middle East accounts for roughly 15% of global polyethylene capacity and 9% of polypropylene capacity. At the beginning of the conflict, the disturbances in Hormuz led to delays in the polymer and much higher freight prices.
Polyethylene is everywhere: in bottles, packaging, pipes, household goods, and industrial materials.
And that’s how a disruption in an oil market thousands of miles away may ripple through to ordinary products.
China helped prevent an even bigger plastics crunch
The supply shock has not yet been as bad as predicted.
BofA believes Chinese polyethylene inventories are down by about 26% from usual early August levels as the country drew on stockpiled material to help maintain production and markets were fed.
The broader energy figures show a similar picture.
In the second quarter, China’s crude imports fell to 8.1 million barrels a day, a 32% decline from the previous quarter, the EIA said. Imports in May and June fell below 8 million barrels a day for the first time since 2016.
U.S. producers, however, stepped in to fill the gap.
US exports of crude oil and petroleum products touched a record 13.6 million barrels a day in April, up 15% from the previous high just a month earlier.
The same phenomenon also occurred in plastics.
S&P Global said bookings for U.S. resin exports rose as Middle Eastern supplies were less accessible, with daily bookings hitting 6,191 on March 16 vs. the more typical 3,500-to-4,500 range earlier in 2026. U.S. resin exporters get boost from disruption.
BofA sees opportunity in 4 stocks getting caught in the oil trade
This is where it gets more interesting for investors.
BofA does not see today’s raw-material inflation as necessarily systemic.
In three months, the bank’s investigation found its coatings companies were able to pass through about 90% or more of inflation through price.
Its latest raw-material model also leads to around 6% year-over-year inflation in the second half, below its earlier 7.6% forecast.
That might be a formidable mix.
If raw-material inflation continues to ease and price increases already put in by paint and coatings industries stick, margins could improve sooner than anticipated.
BofA’s preferred stocks in the oil-driven selloff
- Axalta: Buy; $42 price objective versus $36.11 in BofA’s report.
- Ecolab: Buy; $342 objective versus $275.84.
- PPG Industries: Buy; $137 objective versus $113.44.
- RPM International: Buy; $130 objective versus $112.23.
There is still a lot of risk.
Hormuz is not a conventional shipping waterway that could just be substituted. The EIA believes that Saudi Arabian and UAE pipelines together can transit the strait with around 4.7 million barrels per day of capacity, just a tenth of average Hormuz flows.
Reuters also reported this week that real oil flows are still severely affected, with shipments recently running at approximately 8 million barrels per day, compared with more than 20 million before the fighting.
But that’s what makes BofA’s finding unusual, too.
Despite some companies effectively passing on higher costs to clients and underlying chemical prices retreating from their early-conflict levels, oil is having a huge impact on chemical and coatings equities.
For consumers the effect may eventually show up as yet another price hike on paint, plastics or household products.
For investors, the more intriguing possibility is the opposite:
Some stocks may already be pricing in more oil pain than their businesses ultimately have to absorb.
