US retailers are scrambling to adjust their strategies as tariff rules shift again, adding fresh uncertainty to consumer spending and profit outlooks in 2026. Key Takeaways Tariff rate raised to 15% after Supreme Court ruling Retailers warn of “policy whiplash” complicating planning Companies reluctant to raise prices amid cautious consumers Middle East tensions add new shipping and fuel cost risks Tariff Landscape Shifts Again The US government lifted temporary import levies to 15% , up from 10%, after the Supreme Court struck down emergency duties. Retailers say the bigger problem isn’t just higher tariffs — it’s unpredictability. Key Point: Policy volatility, not just tariff levels, is the main risk for retailers. Companies can plan for higher costs — but not for rules that change week to week. Who Is Most Affected? Abercrombie & Fitch Factored the 15% tariff into forecasts Estimated 70 basis-point hit (~US$40 million) Previously projected US$90 million impact Best Buy Heav...
Shares of PETRONAS Chemicals Group Bhd jumped to a four-month peak as analysts say the Middle East crisis is handing the company a rare cost advantage over global peers.
CGS International upgraded the stock to “add” (from “reduce”) and lifted its FY2026 earnings forecast to RM143 million, reversing a prior projected loss of RM667 million. Target price: RM4.45 — implying over 20% upside.
Key Takeaways
PetChem benefits from domestic gas feedstock supply
Brent up 17%, naphtha up 26%, LNG up 50% amid Hormuz shutdown
Naphtha-based plants globally face production cuts
Analysts see earnings turnaround in FY2026
Why PetChem Is a Winner
The key advantage: PetChem sources its gas feedstocks domestically, avoiding reliance on Middle Eastern supply.
This shields its:
Kertih Olefins & Derivatives (O&D) complex
Fertilisers & Methanol (F&M) division
Unlike naphtha-based producers, PetChem benefits from:
Fixed, low long-term ethane pricing
Methane costs pegged to end-product selling prices
Stable Ebitda margins across cycles
Key Point: Domestic feedstock supply gives PetChem a structural cost advantage during the energy shock.
Global Feedstock Shock Intensifies
The closure of the Strait of Hormuz has locked in:
25% of global seaborne crude trade
18% of seaborne LNG trade
Energy price impact:
Brent crude +17%
Naphtha +26%
Spot LNG +50%
Naphtha-based petrochemical plants are expected to face:
20–25% production and demand cuts
Operating rate reductions or shutdowns
This could last 6–12 months, according to analysts.
Limited Downside Risks
Some pressure may hit PetChem’s Pengerang Petrochemical Company (PPC) plants due to:
Crude import shortages
Higher feedstock costs
However, CGS expects stronger earnings from Kertih and F&M to more than offset PPC losses.
What Could Change the Story?
Upside catalyst:
Product prices remain elevated for six months even if the war ends early
Downside risk:
Rapid reopening of Hormuz
Sudden flood of petrochemical supply
Sharp reversal in feedstock prices
Bottom Line
While many global petrochemical producers are squeezed by soaring naphtha and LNG costs, PetChem stands out as a low-cost beneficiary thanks to domestic gas supply and favourable pricing structures.
In a supply-constrained world, cost advantage becomes earnings power.
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