Rising oil prices are no longer just an energy market story; they are feeding directly into the cost of clothing. From petrochemical plants to fabric mills and retail racks, a complex supply chain is passing on higher costs, pushing up the final price consumers pay.
According to the “Materials Market 2025” report by the Organization for Textile Exchange, polyester makes up about 59% of global fabric output, with roughly 88% produced from non-recycled petroleum sources, leaving the industry exposed to energy price swings.
Oil prices have surged about 32% since the start of the US-Israeli war on Iran on Feb. 28, approaching $100 per barrel.
Fabrics under oil pressure
Amal Saqr, a textile design consultant, said the sector is highly sensitive to shifts in oil prices because of its reliance on synthetic fibers.
More than 60% of fabrics used in global clothing production depend on petroleum-based materials such as polyester, nylon and acrylic, she said, adding that any rise in oil prices feeds directly into fabric costs.
She pointed to 2008, when polyester prices jumped about 30% within three months as oil hit record highs, forcing Asian spinning mills to cut output by 20% to 25%.
Disruptions in the Red Sea between 2023 and 2024 also drove shipping costs up by about 300%, raising raw material costs and straining supply chains.
Yemen’s Iran-aligned Houthis began targeting ships linked to Israel on Nov. 19, 2023, using drones and missiles.
Natural fabrics not immune
Natural fibers such as cotton and linen avoid direct reliance on oil, but are still exposed to energy costs, Saqr said, noting that farming depends on fertilizers, fuel and transport.
The global fertilizer crisis in 2021 pushed prices up about 80%, driving cotton prices higher by roughly 40%. Later disruptions in the Strait of Hormuz added another 40% increase in fertilizer costs due to shipping delays.
Global cotton production reached about 24.5 million tons in 2024, or roughly 19% of total fiber output, making it less dominant than synthetic fibers but relatively more stable in pricing, according to the Textile Exchange report.
Rising production costs
Higher energy prices are hitting every stage of production, from spinning to dyeing and drying, Saqr said.
With already thin margins, textile factories face a stark choice: raise prices or cut output, both of which ultimately hit consumers.
World Bank data shows operating costs for textile factories in several countries have risen by about 18% following recent energy price increases.
Import markets feel it fast
Import-dependent markets are quick to absorb shocks from shipping or energy disruptions, Saqr said.
Shipping costs from Asia have lifted synthetic fabric prices by 10% to 18%, while imported cotton prices have climbed by 15% to 25%.
Rerouting shipments from the Strait of Hormuz to the Cape of Good Hope has added 10 to 14 days to transit times, leading to shortages and swings in the availability of fabrics and garments.
Value chains under rethink
Burak Cakmak, chief executive of the Saudi Fashion Commission, said the impact of oil prices is not immediate, as final pricing reflects a full value chain including production, marketing and distribution.
Instead of passing costs on, many brands are rethinking how to create value, improving efficiency and working more closely with suppliers, he said.
He also pointed to a shift toward localized production, with brands operating closer to their markets and managing inventory more tightly to control costs and improve flexibility.
Sustainability gains urgency
Sustainability is no longer just an environmental concern; it is tied to efficiency and long-term economic viability, Cakmak said.
The sector is moving toward circular models, including recycling and waste reduction, practices that are becoming essential to improving operations.
Designers double down
Anna Zinola, director of Istituto Marangoni in Riyadh, said rising oil prices are reinforcing, not reshaping, designers’ shift toward more conscious material choices.
Sustainability is embedded in the curriculum as a core approach guiding every design decision, she said.
Students are trained to balance cost, sustainability and consumer demand, while exploring material innovations that combine environmental and commercial goals.
Prices set to rise
Reports by McKinsey and Euratex expect global clothing prices to rise by 8% to 12% over the next year, as supply chain pressure persists and shipping costs remain elevated.
